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Learn Challenge: Portfolio Return and Risk Calculation | Investment Metrics and Portfolio Analysis
Python for Investors
Section 2. Chapter 3
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bookChallenge: Portfolio Return and Risk Calculation

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Task

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You are given a DataFrame of monthly returns for four assets and a list of portfolio weights. Complete the following steps:

  • Calculate the portfolio's monthly returns using the given weights;
  • Compute the average monthly return of the portfolio;
  • Calculate the volatility (standard deviation) of the portfolio's monthly returns;
  • Calculate the Sharpe Ratio for the portfolio, assuming a risk-free rate of 0.5% per month;
  • Print a summary of the calculated metrics, including the average monthly return, volatility, and Sharpe Ratio, each on a separate line.

Use only the libraries provided in the starter code. Do not modify the given data or weights.

Solution

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Section 2. Chapter 3
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