Calculating Diversifiable and Non-Diversifiable Risk of a Portfolio

Calculating Portfolio Risk

Calculation the Covariance between Securities

Calculating the Risk of a Security

Calculating the Return of Indices

Popular stock indices that can help us understand financial markets

Top US Market indices

– S&P 500
500 largest listed companies
Diverse constituency
True approximation of the US stock market

– Dow Jones Industrial Average
30 large public stocks
one of the historically oldest indices
equally weighted
NOT a true representation of the US stock market

Grouped securities
IT companies
Rate of return of tech stocks

Other countries
– DAX 30 (Germany)
– NIKKEI (Japan)
– Shanghai Stock Exchange (China)

Global indices
Includes stocks from all developed markets in the world.