Course Title: Business Finance II

Course ID: FIN302

Section: 02
Semester: Spring, 2022

Submitted to:
Mr. Mohammad Fahad Noor
Senior Lecturer, School of Business and Entrepreneurship
Independent University, Bangladesh

Submitted by:

Name ID
Pranta Majumder 2022603
Afifa Sumiya Tonni 1930313
Tangim Hasan Shourav 1931347
Mst. Jannatul Ferdows Dolon 1930205

Date of Submission: April 07, 2022

1|Page
Table of Content

Acknowledgement ..................................................................................................................................... 03
Letter of Transmittal .................................................................................................................................. 04
Executive Summary ................................................................................................................................... 05
Introduction ................................................................................................................................................ 06
Average Return ......................................................................................................................................... 07
Average Return for Portfolio 1 .............................................................................................................. 07
Average Return for Portfolio 2 .............................................................................................................. 07
Variance .................................................................................................................................................... 08
Variance for Portfolio 1 ......................................................................................................................... 08
Variance for Portfolio 2 ......................................................................................................................... 08
Standard Deviation .................................................................................................................................. 08
Standard Deviation for Portfolio 1 ......................................................................................................... 09
Standard Deviation for Portfolio 2 ......................................................................................................... 09
Covariance ................................................................................................................................................ 09
Covariance for Portfolio 1 ..................................................................................................................... 10
Covariance for Portfolio 2 ..................................................................................................................... 12
Correlation ................................................................................................................................................ 13
Correlation for Portfolio 1 ..................................................................................................................... 14
Correlation for Portfolio 2 ..................................................................................................................... 15
Beta ............................................................................................................................................................ 17
Beta for Portfolio 1 ................................................................................................................................ 18
Beta for Portfolio 2 ................................................................................................................................ 18
Variance- Covariance Matrix ................................................................................................................. 19
Variance- Covariance Matrix for Portfolio 1 ......................................................................................... 19
Variance- Covariance Matrix for Portfolio 2 ......................................................................................... 19
Constructing optimal portfolio ................................................................................................................ 20
Optimal portfolio for Portfolio 1............................................................................................................ 20
Optimal portfolio for Portfolio 2............................................................................................................ 20
Portfolio Expected Return, Standard Deviation and Beta .................................................................... 21
Optimal Portfolio 1 (Similar Industries) ................................................................................................ 21
Optimal Portfolio 2 (Difference Industries) ........................................................................................... 21
Final Comparison ..................................................................................................................................... 22
Z Score: Prediction of Bankruptcy Situation ......................................................................................... 23
Portfolio 1 (Similar Industries) .............................................................................................................. 19
Portfolio 2 (Difference Industries) ......................................................................................................... 19
Conclusion .................................................................................................................................................. 25
Bibliography ............................................................................................................................................... 25

2|Page
Acknowledgement
We have taken efforts in this project. However, it would not have been possible without the kind
support and information that we get from the internet. Thanks, and appreciations also go out to
the members of our group who worked on the project and to others who have volunteered to
assist us with their skills. The knowledge we gathered throughout the course will help us develop
our future career.
We are highly indebted to our honorable faculty Mr. Mohammad Fahad Noor, for his guidance
and constant supervision as well as for providing required project details, as well as his assistance
in completing the project.

3|Page
Letter of Transmittal
April 7, 2022
To,
Mr. Mohammad Fahad Noor
Senior Lecturer, School of Business & Entrepreneurship
Independent University, Bangladesh (IUB)
Bashundhara R/A, Dhaka.

Subject: Submission of report on Portfolio optimization on historic stock prices.

Dear Sir,

We are overwhelmed with pleasure to present to you the result of our hard work on this semester’s
project on constructing two portfolios and analysis. We have done enough research on the topic to
cover every detail possible. All our group members gave their best efforts in preparing this business
report. We have given our level best to follow all the instructions given in class and concepts that
we have learnt on our course have also been included. The content provided in the report is all
done by our own, However, some references have been taken.

We will be glad to clarify any queries and will be more than happy to accept any corrections or
suggestions related to this semester project report. Thank you for giving us this opportunity. We
would also like to express our gratitude for your support and kind consideration.

Sincerely Yours,
Pranta Majumder
Afifa Sumiya Tonni
Tangim Hasan Shourav
Mst Jannatul Ferdows Dolon

4|Page
Executive Summery
The report is based on two different portfolios which contain Seven stocks each. The main goal of
this report is to construct two different portfolios and find out the better performing portfolio over
the last 13 years by calculating. All the information regarding stocks like month ending adjusted
closing price is collected from yahoo finance and other relevant websites and the calculated data
is taken from the excel file.

In this report, we have explained the average return, variance, standard deviation, covariance,
correlation, beta for individual stocks and variance-covariance matrix also by constructing optimal
portfolio using solver and then portfolio expected return, portfolio standard deviation and portfolio
beta for each portfolio and latest years Z-score of the companies to predict the bankruptcy situation
for each of the portfolio. It provides a review of the portfolio stocks and an overall analysis of the
portfolios. The experience and knowledge gained from this group work will help us in future.

5|Page
Introduction
Our research is primarily focused on the creation of two ideal portfolios (each with Seven
industries) and appropriate analysis for better performance understanding. We did this by
compiling the closing stock prices of 16 well-known corporations worldwide during the previous
13 years (8 industries in total. Seven industries that are similar and 08 industries that are different)
from Yahoo Finance. We have put a lot of effort into this report. On average return, variance,
standard deviation, and covariance calculations and interpretation individual equities in each
portfolio have a correlation and a beta. Furthermore, we computed Covariance and Correlation for
both portfolios, which is a crucial tool in the creation of an ideal portfolio.

The variance – covariance matrix was also constructed.

The following are the businesses in which we worked:

Portfolio -1 was made up of seven companies from the same industry, which was healthcare.

▪ UnitedHealth Group Incorporated (UNH)

▪ Johnson & Johnson (JNJ)
▪ Pfizer Inc. (PFE)
▪ Novo Nordisk A/S (NVO)
▪ Abbott Laboratories (ABT)
▪ AmerisourceBergen Corporation (ABC)
▪ Biogen Inc. (BIIB)
▪ Bio-Rad Laboratories, Inc. (BIO)

Portfolio -2 consisted of seven companies belonging to seven different industrial field.

▪ The Walt Disney Company (DIS)

▪ Amazon.com, Inc. (AMZN)
▪ eBay Inc. (EBAY)
▪ The Coca-Cola Company (KO)
▪ PepsiCo, Inc. (PEP)
▪ Walmart Inc. (WMT)
▪ Boston Properties, Inc. (BXP)
▪ Caterpillar Inc. (CAT)

6|Page
Mathematical Indicators
Average Return
Return in finance is most usually defined as the change in the value of an investment or a stock
over time. It can take the shape of a price change or a percentage change. Investors typically expect
a positive return, which shows a profit or gain on investment. Negative return value, on the other
hand, shows a loss on investment. We must compute the individual market returns on each of the
company's closing stock prices to get the average return. The formulae we used in the excel
spreadsheet was: = (New Price-Previous Price)/Previous Price

An investor or analyst can assess the company's or portfolio's trendline over time by looking at the
value of the average return. Next, we calculated the average return using the calculations below in
an Excel spreadsheet: =AVERAGE (sum of all the returns of the selected company).

Average Return for Portfolio 1

UNH JNJ ABT ABC BIIB BIO PFE NVO

0.0208 0.0080 0.0111 0.0173 0.0123 0.0149 0.0152 0.0184

Pfizer Inc. (PFE) here is in the lead on average return compared to the other companies in the
same industry.

Average Return for Portfolio 2

DIS AMZN EBAY KO PEP WMT BXP CAT

0.0156 0.0297 0.0203 0.0077 0.0088 0.0084 0.0094 0.0160

Here, Amazon.com, Inc. (AMZN) has the highest return among these 8 companies.

7|Page
Variance
The term "variance" refers to the calculation of the spread between integers in a data set. It
calculates the deviation of each integer in the set from the mean. The lower the variance, the less
the stock varies widely. In Excel, we used the following formulas:

VAR =VAR (all returns of the selected company)

Variance for Portfolio 1

UNH JNJ PFE NVO ABT ABC BIIB BIO
0.0041 0.0020 0.0034 0.0041 0.0030 0.0039 0.0089 0.0048

All the company in this portfolio shows healthy volatility.

Variance for Portfolio 2

DIS AMZN EBAY KO PEP WMT BXP CAT
0.0051 0.0070 0.0075 0.0021 0.0016 0.0023 0.0055 0.0075

All the companies in this portfolio shows healthy volatility.

Standard Deviation
The standard deviation of an investment is a measure of its risk. By determining the variation
between each data point relative to the mean, it is determined as the square root of variance. In
Excel, we used the following formulas:

=SQRT(Variance)

8|Page
Standard deviations for Portfolio 1
UNH JNJ PFE NVO ABT ABC BIIB BIO
0.0642 0.0444 0.0585 0.0639 0.0546 0.0627 0.0945 0.0692

Biogen Inc. (BIIB) has a higher standard deviation of 0.0945 in percentage it comes around 9.45%.
The unpredictability is higher for that company.

Standard deviations for Portfolio 2

DIS AMZN EBAY KO PEP WMT BXP CAT
0.0714 0.0835 0.0869 0.0459 0.0399 0.0478 0.0745 0.0864

eBay Inc. (EBAY) has a higher standard deviation of 0.0869 in percentage it comes around 8.69%.
The unpredictability is higher for that company.

Covariance
The directional link between the returns of two variables or assets is measured statistically as
covariance. It is used to minimize a portfolio's overall risk by increasing the portfolio's
diversification. A positive covariance means the variables are moving in the same direction,
whereas a negative covariance means they are moving in opposite directions. Covariance can have
values ranging from negative infinity to positive infinity.

The formula we used in MS Excel, to calculate the covariance of two stocks was,

=COVARIANCE.P was the formula we used in MS Excel to determine the covariance of two
equities (returns for company 1, returns for company 2)

For example, the covariance of Pfizer Inc. (PFE) and Johnson & Johnson (JNJ) was calculated
using the formula,

=COVARIANCE.S(SHARE2, SHARE3)

9|Page
Covariance of Portfolio 1 (Similar Industries)

Covariance

UNH:JNJ 0.0013

UNH:PFE 0.0018

UNH:NVO 0.0011

UNH:ABT 0.0011

UNH:ABC 0.0016

UNH:BIIB 0.0017

UNH:BIO 0.0016

JNJ:PFE 0.0014

JNJ:NVO 0.0010

JNJ:ABT 0.0014

JNJ:ABC 0.0009

JNJ:BIIB 0.0009

JNJ:BIO 0.0010

PFE:NVO 0.0013

PFE:ABT 0.0017

10 | P a g e
 PFE:ABC 0.0012

PFE:BIIB 0.0013

PFE:BIO 0.0017

NVO:ABT 0.0014

NVO:ABC 0.0008

NVO:BIIB 0.0012

NVO:BIO 0.0014

ABT:ABC 0.0013

ABT:BIIB 0.0015

ABT:BIO 0.0015

ABC:BIIB 0.0018

ABC:BIO 0.0013

BIIB:BIO 0.0014

In this case, all covariances are positive, however the values of covariance between stocks are
quite low.

11 | P a g e
Covariance for Portfolio 2 (Different Industries)

Covariance

DISA:MZN 0.0014

DIS:EBAY 0.0025

DIS:KO 0.0016

DIS:PEP 0.0011

DIS:WMT 0.0007

DIS:BXP 0.0028

DIS:CAT 0.0030

AMZN:EBAY 0.0028

AMZN:KO 0.0010

AMZN:PEP 0.0010

AMZN:WMT 0.0007

AMZN:BXP 0.0011

AMZN:CAT 0.0018

EBAY:KO 0.0007

EBAY:PEP 0.0007

EBAY:WMT 0.0002

EBAY:BXP 0.0027

12 | P a g e
 EBAY:CAT 0.0031

KO:PEP 0.0013

KO:WMT 0.0008

KO:BXP 0.0011

KO:CAT 0.0010

PEP:WMT 0.0008

PEP:BXP 0.0011

PEP:CAT 0.0007

WMT:BXP 0.0005

WMT:CAT 0.0004

BXP:CAT 0.0029

For portfolio 2, covariances between The Walt Disney Company (DIS) and Caterpillar Inc. (CAT)
are extremely high. Meaning these two pairs of stocks have a very high positive relationship.

Correlation
The correlation coefficient is a statistical technique that is used to determine how strong a linear
relationship between two securities is. The numbers might be anything between -1 and +1. When
the correlation is positive, the two stocks are traveling in the same direction; when the correlation
is negative, the securities are moving in opposite ways. When the value is 0, it indicates that the
two securities have no linear relationship.

13 | P a g e
Correlation of Portfolio 1 (Similar Industries)

Correlation

UNH:PFE 0.4528

UNH:NVO 0.4756

UNH:ABT 0.2633

UNH:ABC 0.3192

UNH:BIIB 0.3932

UNH:BIO 0.2778

JNJ:PFE 0.3636

JNJ:NVO 0.5532

JNJ:ABT 0.3613

JNJ:ABC 0.5605

JNJ:BIIB 0.3273

JNJ:BIO 0.2112

PFE:NVO 0.3331

PFE:ABT 0.3587

PFE:ABC 0.5271

PFE:BIIB 0.3251

PFE:BIO 0.2367

14 | P a g e
 NVO:ABT 0.4161

NVO:ABC 0.3955

NVO:BIIB 0.2006

NVO:BIO 0.1970

ABT:ABC 0.3124

ABT:BIIB 0.3677

ABT:BIO 0.3002

ABC:BIIB 0.3965

ABC:BIO 0.3039

BIIB:BIO 0.2968

UNH:PFE 0.2157

All the correlation values are positive, indicating the stocks move in the same direction.

Correlation for Portfolio 2 (Different Industries)

Correlation

DISA:MZN 0.2403

DIS:EBAY 0.4096

DIS:KO 0.4887

DIS:PEP 0.3926

15 | P a g e
 DIS:WMT 0.1979

DIS:BXP 0.5193

DIS:CAT 0.4919

AMZN:EBAY 0.3878

AMZN:KO 0.2563

AMZN:PEP 0.2965

AMZN:WMT 0.1796

AMZN:BXP 0.1717

AMZN:CAT 0.2474

EBAY:KO 0.1810

EBAY:PEP 0.1998

EBAY:WMT 0.0529

EBAY:BXP 0.4248

EBAY:CAT 0.4135

KO:PEP 0.6920

KO:WMT 0.3546

KO:BXP 0.3102

KO:CAT 0.2516

PEP:WMT 0.4352

16 | P a g e
 PEP:BXP 0.3633

PEP:CAT 0.2034

WMT:BXP 0.1329

WMT:CAT 0.0974

BXP:CAT 0.4452

portfolio 1, all the correlations for portfolio 2 are positive. However, compared to portfolio one,
the correlation values are quite lower.

Beta

Beta is a measure of a stock's volatility or sensitivity to general stock market increases and
decreases. The beta coefficient could be written as follows:

β = 1; Equal risk. Stocks are just as risky as the stock market.

β > 1; More risk, more return. In comparison to the market, shares are
more volatile.
β < 1 >0; Less risk, less return. In comparison to the market, stocks are
less volatile.
β = 0; Risk-free asset. Stocks are not correlated with the overall market.
β < 0; Stocks have a negative relationship with the market. Moves in
opposite direction as the market.
The individual returns of each stock, as well as the equivalent returns of the market price indexes,
were utilized to compute the beta of individual stocks.
For MS Excel, the following formula was used:

=COVARIANCE.P(Return of Stock, Return of Market)/VAR.P(Return of Market).

17 | P a g e
For example, the following formula was used to determine the beta of The Johnson & Johnson
(J&J) in Excel:

=COVARIANCE.S(N6:N160,$V6:$V160)/VAR.S($V6:$V160)

Beta for Portfolio 1 (Similar Industries)

Company Name Beta
UNH 0.841842
JNJ 0.671149
PFE 0.768724
NVO 0.647710
ABT 0.722507
ABC 0.661901
BIIB 0.696360
BIO 1.014156

Beta for Portfolio 2 (Different Industries)

Company Name Beta
DIS 1.270428
AMZN 0.956474
EBAY 1.21966
KO 0.611308
PEP 0.531995
WMT 0.376325
BXP 1.10185
CAT 1.38967

All the stocks in portfolio 1 moved in the very same direction as the market, but in comparison to
the market, stocks of Bio-Rad Laboratories, Inc. (BIO) are more volatile than the others.

All the stocks in portfolio 2 moved in the very same direction as the market. In comparison to the
market, stocks of Walmart Inc. (WMT) & PepsiCo, Inc (PEP) were less volatile and stocks of The
Walt Disney Company (DIS), eBay Inc. (EBAY), Boston Properties, Inc. (BXP) & Caterpillar Inc.
(CAT) were more volatile.

18 | P a g e
Variance-Covariance Matrix

The variance-covariance matrix is a square matrix that includes a network of all variance and
covariance values related to the portfolio's variables. The variances of the variables or stocks are
represented by the diagonal values of the matrix, and the covariances between all possible pairings
of stocks are represented by the off-diagonal values of the matrix.

In MS Excel, the following formula is used to generate the variance-covariance matrix:

=MMULT (TRANSPOSE (all returns), (all returns))

So, the formula we used to compute the variance-covariance matrix for portfolio 1 was:

=MMULT(TRANSPOSE(N164:U319),N164:U319)

By doing that, we generated the variance-covariance matrices below.

Variance-Covariance Matrix for Portfolio 1 (Similar Industries)

Variance-Covariance Matrix
Question No-2 UNH JNJ PFE NVO ABT ABC BIIB BIO
UNH 0.6344 0.1988 0.2751 0.1666 0.1725 0.2441 0.2597 0.2489
JNJ 0.1988 0.3288 0.2406 0.1650 0.2262 0.1524 0.1477 0.1625
PFE 0.2751 0.2406 0.5413 0.2119 0.2721 0.1929 0.2101 0.2631
NVO 0.1666 0.1650 0.2119 0.6305 0.2173 0.1274 0.1865 0.2143
ABT 0.1725 0.2262 0.2721 0.2173 0.4700 0.2020 0.2460 0.2340
ABC 0.2441 0.1524 0.1929 0.1274 0.2020 0.6115 0.2827 0.2009
BIIB 0.2597 0.1477 0.2101 0.1865 0.2460 0.2827 1.3791 0.2196
BIO 0.2489 0.1625 0.2631 0.2143 0.2340 0.2009 0.2196 0.7382

Variance-Covariance Matrix for Portfolio 2 (Different Industries)

Variance-Covariance Matrix
Question No-2 DIS AMZN EBAY KO PEP WMT BXP CAT
DIS 0.7851 0.2208 0.3914 0.2469 0.1725 0.1043 0.4254 0.4673
AMZN 0.2208 1.1045 0.4437 0.1342 0.1376 0.0950 0.1511 0.2759
EBAY 0.3914 0.4437 1.1656 0.1056 0.1020 0.0288 0.4189 0.4783
KO 0.2469 0.1342 0.1056 0.3345 0.2038 0.1289 0.1711 0.1534
PEP 0.1725 0.1376 0.1020 0.2038 0.2526 0.1357 0.1730 0.1078

19 | P a g e
 WMT 0.1043 0.0950 0.0288 0.1289 0.1357 0.3604 0.0800 0.0617
BXP 0.4254 0.1511 0.4189 0.1711 0.1730 0.0800 0.8600 0.4408
CAT 0.4673 0.2759 0.4783 0.1534 0.1078 0.0617 0.4408 1.1491

Constructing optimal portfolio

The objective of an optimal portfolio is to maintain variance to a minimum and to reduce it as

much as possible. Then, anticipating that the portfolio return would be greater, we assigned each
company a specified weight. We had to utilize Solver in Excel from the Add-on choices to do this.
The optimal weights evaluated the effectiveness of incurring risks for an investment based on the
quantity. The weights are

Optimal Portfolio for Similar Industries (Portfolio 1)

Optimal Risk Portfolio

UNH 0.075038
JNJ 0.414679
PFE 0.011932
NVO 0.149661
ABT 0.08037
ABC 0.152907
BIIB 0.03367
BIO 0.081743
SUM 1

Optimal Portfolio for Different Industries (Portfolio 2)

Optimal Risk Portfolio

DIS 0
AMZN 0.038011
EBAY 0.065324
KO 0.142994
PEP 0.387609
WMT 0.29663
BXP 0.021804
CAT 0.047627
SUM 1

20 | P a g e
Portfolio Expected Return, Standard Deviation and Beta

We must recalculate the portfolio expected return, standard deviation, and beta using the optimal
weights after generating the optimal portfolio. The portfolio expected return, portfolio standard
deviation, and portfolio beta were computed by using formulas below.

Portfolio Expected Return: =MMULT(Y5:AF5,AS21:AS28)

Portfolio Standard Deviation: =SQRT(AS32) where AS32 is the variance.

Portfolio Beta: =SUM(AS37:AS44), AS37:AS44

was the product of each stock's weight and beta.

Optimal Portfolio 1 (Similar Industries)

Portfolio Return 0.012893

Portfolio Variance 0.238558

Portfolio SD 0.488424

Optimal Portfolio 2 (Different Industries)

Portfolio Return 1.04%

Portfolio Variance 18.81%

Portfolio SD 43.37%

21 | P a g e
Final Comparison

Portfolio 1 (Similar Portfolio 2 (Different Better

Industries) Industries) performance

portfolio 1
return 0.012893 0.010426

portfolio 1
variance 0.238558 0.188098

portfolio SD 0.488424 0.433703 1

Portfolio Beta 0.713215 0.611490 1

Portfolio Return is a measure of the gain or loss realized by an investor for an investment on a
portfolio containing a mixture of assets. When comparing the portfolio returns for the two optimal
portfolios, portfolio 1 has a return of 0.012893 and portfolio 2 has a return of 0.010426. We can
see that portfolio 1 has higher returns compared to portfolio 2, hence portfolio 1 has better
performance than portfolio 2.

Portfolio variance and portfolio standard deviation: Portfolio variance is a measure of the
dispersion of return of a portfolio and the standard deviation of a portfolio measures how much
the investment return differs from the mean of the probability distribution of investment. Portfolio
variance for portfolio 1 is 0.238558 while for portfolio 2 is 0.188098. Standard deviation for
portfolio1 standard deviation is 0.488424 while portfolio 2 standard deviation for 0.433703.
Portfolio variance and standard deviation for portfolio 2 is lower so it's less risky and safer.
Portfolio 1 has a higher variance and standard deviation hence it’s more risky.

22 | P a g e
Portfolio Beta measures the relative sensitivity or volatility of a portfolio investment. A portfolio
with higher beta poses more risks but yields higher returns. Portfolio beta for portfolio 1 is
0.713215 while for portfolio 2 is 0.611490.

The results for both the portfolios were not very high, however, Portfolio 1 has a greater portfolio
beta compared to portfolio 2, hence it is riskier and will generate higher return.

So, in terms of overall performance portfolio 2 is safer and generates more return in comparison
to portfolio 1. For a risk averse investor portfolio 2 is a better choice than portfolio 1, while for a
risk lover portfolio 1 can be much more suitable.

Z Score: Prediction of Bankruptcy Situation

Its rating has been used to measure borrowers' creditworthiness and even a firm ’s credit strength,
that determines the possibility of bankruptcy for all public limited companies. Total assets,
networking capital, sales, book value, cumulative retained earnings, and other factors are all
considered when determining the Z score or bankruptcy situation of the company.

Formula of Z Score:
Z = 1.2*Net Working Capital/Total Asset + 1.4*Accumulated Retained Earnings/Total
Asset+3.3*EBIT/Total Asset + 0.6*Market Value of Equity/Book Value of Debt +
1.0*Sales/Total Asset.

Z score of 1.81 to 2.99 for a public limited business is regarded to be in the gray area; a Z score of
less than 1.8 implies that the firm is on the verge of bankruptcy, while a score of more than 2.99
indicates that the company is in good financial standing and safe from bankruptcy.

23 | P a g e
Portfolio-1 (Similar Industries)
Year Company name Z Score Prediction
UnitedHealth Group Incorporated
2021 2.637044907 Grey
(UNH)
2021 Johnson & Johnson (JNJ) 2.559671102 Grey
2021 Pfizer Inc. (PFE) 2.46949605 Grey
2021 Novo Nordisk A/S (NVO) 2.553280601 Grey
2021 Abbott Laboratories (ABT) 2.534543254 Grey
AmerisourceBergen Corporation Safe from
2021 3.927599129
(ABC) Bankruptcy
2021 Biogen Inc. (BIIB) 2.528210649 Grey
Safe from
2021 Bio-Rad Laboratories, Inc. (BIO) 4.323779953
Bankruptcy

Portfolio-2 (Different Industries)

Year Company name Z Score Prediction
The Walt Disney Company Risk for
2021 1.434608496
(DIS) Bankruptcy
2021 Amazon.com, Inc. (AMZN) 2.169265885 Gray
Safe from
2021 eBay Inc. (EBAY) 3.197094667
Bankruptcy
2021 The Coca-Cola Company (KO) 2.485954539 Gray
2021 PepsiCo, Inc. (PEP) 2.617520857 Gray
Safe from
2021 Walmart Inc. (WMT) 3.547206148
Bankruptcy
Risk for
2021 Boston Properties, Inc. (BXP) 1.088865116
Bankruptcy
2021 Caterpillar Inc. (CAT) 2.207759617 Gray

24 | P a g e
Conclusion
Two separate portfolios (containing of eight firms each) have been compared to the market in this
research. We worked with 16 firms, five of which were in the healthcare industry, while the rest
were from a variety of different industries. There are several examples of this, such as fact and
utility companies. In addition to the optimum portfolio analysis, stakeholders and connected
parties will get further clarity from the various studies of individual return, average return,
individual risk, market, and portfolio return and risk. We also generated Z-scores for each company
to see if they were strong enough to avoid bankruptcy or weak enough to go bankrupt. If you're
looking to understand the financial health of any of the firms we worked for, this report is a great
place to start. With this research, we intend to assist investors who are interested in the following
markets and get an understanding of how these firms' shares or investments differ from a broader
portfolio. This study is sure to provide a logical investor with an extra push before deciding to buy
in these two stocks.

Bibliography

Yahoo Finance. (2021). Retrieved from

https://finance.yahoo.com/quote/PFE?p=PFE&.tsrc=fin-srch
Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/ABT?p=ABT&.tsrc=fin-srch
Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/NVO?p=NVO&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/NFLX?p=NFLX&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/PEP?p=PEP&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/AMZN?p=AMZN&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/BP?p=BP&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/JNJ?p=JNJ&.tsrc=fin-srch

Yahoo Finance. (2021). Retrieved from https://finance.yahoo.com/quote/SNY?p=SNY&.tsrc=fin-srch

25 | P a g e