Case Study Of Financial Values

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As a team, we analyzed two individual securities, a fund, and the S&P 500 based on historical data. We found closing prices on a monthly basis for a total of 5 years for each security, fund, and index. As individual securities, we analyzed Lululemon Athletica (LULU) and Molina Healthcare (MOH). For our choice of fund, we analyzed USA Mutuals Vice Investor (VICEX). Finally, for the index, we analyzed the S&P 500. We took the historical data from yahoo finance and used Excel to find the Standard Deviations, Sharpe Ratios, HPR's, and regression analysis for each of the securities listed above.
The Beta of the individual security, LULU is about 0.15, while the Beta of the portfolio, VICEX, is about 0.82. This means that for every dollar the
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However, if a stock climbs from $5 to $10, it gained 100% of its value. This could be the reason that the average monthly return is positive. When looking at a monthly basis, the stock could be increasing and decreasing in price, but the increase in price has a greater weight on percentage change. The Sharpe Ratio of LULU, 0.0004, is the lowest of the four securities we analyzed. This means that the risk-adjusted return is very low, and this security wouldn't be the first choice for someone to invest in based on the other options given.
VICEX, the portfolio, has a total annual return of 77% and an average annual return of 12%. This gives VICEX an average monthly return of about 1%. This portfolio competes pretty well against the S&P 500, however the Sharpe is 0.1755. This is considerably lower than the Sharpe of the S&P 500 meaning that on a risk-adjusted basis, the S&P 500 would be a better investment than VICEX. This was the second lowest return when it is compared to the other individual securities and the S&P 500. The average monthly return was closest to the S&P 500. The standard deviation of VICEX, 0.0475, was the second lowest compared to the individual securities and the S&P 500. A low standard deviation is a good indicator when examining securities since it means that their returns vary minimally.
The Beta of VICEX is about 0.815, while the alpha is about 0.0022. The alpha here
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