Portfolio management


As a hedge fund manager of portfolio project, I had to develop an strategy in order to get maximum rate of return on portfolio the main purpose of this simulation project is to learn how to make investment on stock over a 10 week period of time I had to make decisions carefully evaluate my opinions and future options. The project involved starting an investment in stock market and chose stock option carefully in order to achieve my objectives. In this project I make a research on option before making investment in securities and executing trade I tracked performance  on daily basis in order to rebalance my portfolio to keep it consistent I had make an diversify portfolio investment to avoid unsystematic risk I used s &p 500 as my benchmark.

Investment objective and strategy

            My main objectives was total return on my portfolio investment I invest in different stock in order to gain my profit I have to take high risk before investing in any stock I take a look of it graph and its historical prices in order to get the most right decisions the s&P 500 was the benchmark for this portfolio because it’s the average market return of the stocks my investment time horizon for the portfolio was approximately 10 weeks I had to trade minimum of 50 times. I traded a total of 53 trades I was given 100,000, to allocate in different stock options It included allocating about 25% of all stock I can take 25% of each stock. The choice I made for allocation of asset are reflected in chart below my strategy consisted of doing research and choosing a wide variety of investment in order to diversify my portfolio I believed this strategy would help me  to achieve my goal for portfolio.

Asset allocation

Throughout 10 week I worked to stay with my original asset allocation for the current economic condition in the given categories.  By the end of the semester, I was close to my set allocation.  It took a substantial amount of time to actually invest enough in each category to meet my allocation numbers.  I did have to decide if I should adjust my allocation when there was a substantial drop in stock value in March.  I decided that I would remain with my current investments and try to regain what I had lost. Also, I chose to try and acquire a few new investments that I believed could increase in price and give me a profit. I believed this consistency would give me a more accurate view of whether or not I met my goals. Out of all the investments, I found I preferred to invest in stocks and bonds because they were the most straightforward.

Current Economic Situation

In the current economic situation, I would allocate 8% to bonds, 92% to equities, 5% to currencies, and 5% to commodities.   In regards to the 92% in equities,  I would allocate  80% in domestic  large cap equities,  15% in domestic  small cap equities,  10% in international  developed  equities,  and 10% in emerging  market  equities.  I would allocate funds in this way to stay with normal  allocation  proportions  for the given categories,  but also would try to benefit  from currencies  and commodities  without  extreme  amounts  of risk.

I think that merging markets stocks with nasdaq will not exhibit more correlation with developed stock markets this year. The risk with emerging stock markets is that they do not have the foundation and reputation of the developed stock markets.  My view on the Dollar and Euro is that the Dollar is stronger in the economy currently than the Euro. For example $1.00 Dollar is only worth $0.8956 in Euros. This means that there is more buying power for the Dollar than the Euro. This could benefit those who are using the Dollar.  However, those using the Euro will be at a disadvantage. Inflation can pose a risk to investors. Increased inflation will reduce the buying power that people have. This can reduce the confidence of the people who are investing.  Interest rate futures could be beneficial in the event that there is a concern of rising interest rates. They can be used in order to hedge that risk.

Actual Allocations Results

My actual asset allocations  for the portfolio  in the end were 68.2%  in stocks,  15% in cash,  14.3% in bonds,  1.9% in mutual  funds,  0% in options,  and  0.6%  in futures.  My total portfolio value in the end was $5,092,988.18.   This was a total return of 1.86%. My low  point  was  $4,988,692.53   and  my  highest  value  was  $5,099,388.83.   I used  Yahoo Finance,  The  Wall  Street  Journal,  and  other  reputable   online  websites  to  research  my choices.  I also paid attention to headlines in the news in order to see factors that could be influencing the economy.

Investment Style

My investment style was simple because it was both technical and fundamental. I thought that utilizing both would give me a more accurate view of how different securities were doing in terms of performance and other factors that could affect them in the economy. I found that there were fluctuations in the value of investments because people were concerned about the interest rate being raised in the United States. Also, the trading period occurred during when different companies were reporting their earnings to the public.  Towards the end of the project in November, we saw a major drop in the value of stocks because of these and other factors.  Also, the economy of countries dropped and then began to rise again during this time.

Return Analysis

I would choose a management fee of 10%. I have chosen these because I want to charge reasonable prices that reflect the amount of experience that I have. My weekly returns over the 10-week period for my portfolio and the market are shown in the charts below. My portfolio performance compared to the S and P 500 index benchmark that I chose is actually comparable.  I had a loss or gain for the same weeks that the market had a loss or gain and the amounts were similar. Also, I would like to note that I inc1uded the trading day September 9, 2015 in week 10because we only traded one day in that week. I wanted it to accurately include the last day that the Project was open for trading.

weekportfolio returnmarket return


There are different firm, market, and industry reasons that could have influenced why these particular stocks were either my best performers or worst performers. NASDAQ could be doing well because they have been expanding their collection of shows that they offer to the consumer. Facebook paypal could be doing well because they offer a wide variety of products that our economy depends on. well known and meet needs of their respective markets. I think that coke may not be doing well because they are faced with many different television provider competitors.  Also, I think that tesla and yahoo. may have not done as well because they have such a large variety of retailers to compete with. Also, KrSh CSI Chn5y She did not do well and this was a stock I took a risk in investing in because I was not familiar with this particular one. Also, I think my market returns in general are lower due to the fact that stocks dropped a lot in March because of a mixture of things. This included people being nervous about The Federal Reserve raising interest rates, earnings being reported by companies, and other factors.

Top performance Stocks

Top PerformersStocksProfit(loss)

Worst performance Stocks

Worst PerformersStocksProfit(loss)
Tesla Motors1000(10960)
Alphabet Inc.50(427)

Risk Analysis

The standard deviation of my portfolio was 6.03%. My benchmark’s standard deviation was 0.99%. This shows that my total risk is less than my benchmark’s. The beta for my portfolio is 0.513182569.  The market’s beta is equal to 1. This shows that my portfolio has less systematic risk than the average.  This also means that my portfolio will have less expected returns.  My R square is 0.973685912, which shows that about 97% of my portfolio is explained by movements in the market.


Regression Statistics

Multiple R0.986755244

R Square0.973685912

Adjusted R Square0.973113867

Standard Error0.009887873



dfSSMSFSignificance F




CoefficientsStandard Errort StatP-valueLower 95%Upper 95%Lower 95.0%Upper 95.0%
X Variable 1-1.030342260.024974-41.25675.47E-38-1.080612221-0.98007-1.08061-0.98007

My Sharpe ratio was 0.205332. The market Sharpe Ratio was 0.11761. On a risk-adjusted basis, I beat the market benchmark for the Sharpe Ratio. My Turnover ratio was -0.01201 the market’s Turnover ratio was 0.001167.  On a risk-adjusted basis, I did not beat the Turnovermarket benchmark.  My Jenson’s Alpha was 0.000082310. These show that I had small return in regards to the risk that I took. The Sharpe ratio is most appropriate for evaluating my portfolio because it is appropriate for the evaluation of an entire portfolio. The tracking error shows that I followed the benchmark 0.97% of the time. My up-market  beta is 0.46318257  and my down-market beta is 0.54318257_ My market timing  was not great because  I did not make a very highreturn on my portfolio.    

Trading Experience

Throughout the 10 week I enjoyed this simulation project because I have always wondered what it would be like to invest and trade. I have learned to much in this project My trading experienceresulted in 70.17% return for the portfolio. In start I invest in stock of company but later I invest it in stock market nasdaq by investing in it I have gain more profit This was a large return, but I think for my first time trading, it was a good start. I had to closely watch how my portfolio was doing because there could be substantial changes from day to day. I had to keep current with the economy in order to see if there would be an economic factor that could influence the way the market would be doing.  I researched and evaluated each choice that I made in order to try and identify and invest in stocks that would perform well. I had success with diversifying because it helped to balance my portfolio and help me reduce loss. I tried to utilize different types of trades, but I did not have a lot of success with that. I think I did not have enoughexperience in order to use, for example, limit buy orders to highlybenefit me. I would definitely take advantage of the different types of orders if I were to do this again. I also do not think that I had enough information on the market and economy as a whole in order to make the best decisions regarding the investments in my portfolio.  I learned that in order to do well, you must be very educated on how to execute your strategy. I would need to do a lot more research and to be able to dedicate a good amount of time to following how the portfolio was doing on a daily basis. It is a very time consuming endeavour. I always knew this, but the simulation really made this point clear. I would definitely do more research for a good amount of time before actually investing to try and gain a greater return if I had to do this all over again. Also, I would watch the market closely on a daily basis. 1 would keep my objectives because I picked an appropriate allocation for someone of my age with the risk level I was willing to accept. I would keep my selection strategy, but would need a greater amount of experience, knowledge, and skills. I would still use a mixture  of the technical  and fundamental  investment  style because  I think that it combines  important  aspects  of both styles. This portfolio project was challenging because it was a completely new experience.  However, it was very a very beneficial learning experience that gave me a better understanding of how the investment world works.


Portfolio ranking

RankUsernameMarket ValuePortfolio Value%ReturnTrades Made

                                                                        TRANSACTION HISTORY

Trade DateTransactionType/SecuritySymbolCompany NameQTYPriceComm.*Amount*
11/10/2015Market – Buy SpotsGBP=GBP / USD SPOT1001.51-10-151.12
9:30 AM
11/09/2015Market – Buy EquitiesFBFacebook Inc.100106.29-10-10,629.00
2:06 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.100106.32-10-10,632.00
2:05 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.100106.32-10-10,632.00
2:05 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.100106.32-10-10,632.00
2:05 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.100106.3-10-10,630.00
2:04 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.50106.3-10-5,315.00
2:04 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.50106.22-10-5,311.00
2:03 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-5019,350.00-102,118.63
1:51 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-10019,350.00-104,237.25
1:51 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-10019,345.00-104,216.98
1:51 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-10019,355.00-104,257.53
1:50 PM
11/09/2015Market – Buy EquitiesFBFacebook Inc.50106.35-10-5,317.50
1:21 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:17 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:17 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:16 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:16 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:16 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:15 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:15 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:15 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:14 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:13 PM
11/09/2015Market – Sell FuturesNIY/Z5NIKKEI 225 DEC 15-25019,360.00-1010,694.51
1:12 PM

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