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The Beta coefficient of a security, fund, or portfolio represents its market
sensitivity, relative to a given market index and time period. In the case of our assignment the
first stock that I chose was APL (Attock Petroleum Limited) and the relevant market index was
the KSE100 index. The time period that we were expected to focus on was from January 2009 to
September 2010. The beta (ȕ) calculation of Attock petroleum limited revealed that the Beta
Coefficient was 0.536309023. This implies that the relative movements or risk of APL is almost
half of the relative movements of the average risk stock (KSE100index).
it is a statistical measure of how well a regression line approximates real data points.
It is a descriptive measure between 0 and 1 indicating how good one term is at predicting
another. It gives a measure of the goodness of fit. As Attock Petroleum has an R Square of
0.177690258281476 it implies that the approximate fit is around 17.7% of the data which is a
measure used to predict the trend of the data.

is the correlation coefficient which can assume values between 0 and 1. It measures
the degree to which 2 or more X variables are related to the dependent Y variable. It is also the
square root of R2. The Multiple R for Attock Petroleum is 0.421533223223836. The positive
coefficient of this variables shows that the relationship of this stock and the market index is
positive. If the market moves up, the stock will follow and vice versa. The magnitude of this
variable shows the strength of the relationship. A result of less than 1 would suggest that when
the market fluctuates, the stock will fluctuate by a lower percentage in the direction of the
market. This means that the stock is less risky than the market.

Standard Error or the standard error of the mean of multiple samples is the
standard deviation of the sample means and thus gives a measure of their spread. The smaller the
standard error the less the spread and the more likely it is that any sample mean is close to the
population mean. Attock Petroleum has a standard error of 0.040505712249691 which means
that the spread of the returns from the average expected returns is minimal, hence reducing the
riskiness of the stock.
Attock Petroleum has an average weekly return of 0.009237524 which can be seen as a pisitve
sign as it positive, however the magnitude of the result is still relatively weak. It also has a 4.4%
chance of deviating from the expected average return
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The beta (ȕ) calculation for Shell Pakistan revealed that the Beta Coefficient
was 0.885518507. This means that the stock will move up and down with the broad market
averages and it will be almost as risky as the average risk stock (KSE100 index). Moreover, it
will be a little less risky than the market risk since the Beta (ȕ) is a little less than 1.

it is a statistical measure of how well a regression line approximates real data points.
The R Square for Shell Pakistan is 0.237449947921922, which means that the approximate fit is
23.7% of the model which as a measure can be used to predict the trend of the data.

is the correlation coefficient which can assume values between 0 and 1. It measures
the degree to which 2 or more X variables are related to the dependent Y variable. It is also the
square root of R2. The Multiple R for Shell Pakistan is 0.487288362186008. The positive
coefficient of this variables shows that the relationship of this stock and the market index is
positive. If the market moves up, the Shell Pakistan¶s stock will follow and vice versa. The
magnitude of this variable displays the strength of the relationship. A result of less than 1
suggests that when the market fluctuates, the stock will fluctuate by a lower percentage in the
direction of the market. This means that the stock is less risky than the market.

or the standard error of the mean of multiple samples is the standard deviation
of the sample means and thus gives a measure of their spread. The smaller the standard error the
less the spread and the more likely it is that any sample mean is close to the population mean.
Data for Shell Pakistan has a standard error of 0.0557135768825044 which means that the
spread of the returns from the average expected returns is low, hence reducing the riskiness of
the stock.
Shell Pakistan has an average weekly return of 0.002760064, which makes it uneasy for
prospect investors to be sure of the returns. Also it has a 6.3% chance of deviating from this
expected average return. This means that it has a chance of going into further negative which
means that it constitutes more insecurity. However it can also go more positive.
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When the twostock portfolio is considered taking the probability of each
stock as 0.5, we arrive at the Beta Value of 0.710913765. This means that the stock will move up
and down with the broad market averages and it will be less risky than the average risk stock
(KSE100 index). It is however still close to 1 which should be a statistic that should be taken
into consideration.

is a statistical measure of how well a regression line approximates real data points. It
is a descriptive measure between 0 and 1 indicating how good one term is at predicting another.
The R Square for the portfolio is 0.000192718857209933, which means that the approximate fit
is 1.9% of the model, which as a measure can be used to predict the trend of the data.

The multiple R for the portfolio is 0.0138823217514194. The positive coefficient of
this variable shows that the relationship of this portfolio and the market index is positive. That is,
if the market moves up, the portfolio will follow and vice versa. The magnitude of this variable
shows the strength of the relationship. If the market fluctuates by 1 percent, the portfolio will
fluctuate by a considerably lower percentage in the direction of the market.

or the standard error of the mean of multiple samples is the standard deviation
of the sample means and thus gives a measure of their spread. The smaller the standard error the
less the spread and the more likely it is that any sample mean is close to the population mean.
The portfolio has a standard error of 0.0454890485375405 which means that the spread of the
returns from the average expected returns is less, hence reducing the riskiness of the portfolio.
The portfolio has an average weekly return of 0.00323873, which will not be attractive to
potential rational investors. Moreover, it has a 4.5% chance of deviating from this expected
average return. This means that it has a small chance of going into further negative or further
positive. We can observe that a lot of risk and volatility has been taken off from the individual
stocks serving the purpose that a portfolio serves.
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