Hello All,
I hope i've posted this in the right area as it seems to be a probability / stats question based on optimisation.
Whilst i don't have a full question (this is something i curious about) it would be a great help if you could provide me with a walk through for the basic example bellow. this way i can always extrapolate it to a larger set of numbers.
How would i go about calculating the following:
If i had two companies and their monthly share prices over several years and i wanted to find out which one of three ratios between the two companies was the best, how would i calculate the return to risk ration on it?
For example:
A B
12% 17%
15% 10%
19% 6%
15% 15%
And i wanted to make it 80% A and 20% B (or any other set of percentages)
What is the best way to calculate the return to risk ration using this break down?
Thanks for all the help