3.

Portfolio includes stocks of equal weight

Variance is the difference between a stock's return and its own average return.
Covariance is the variance of one stock's return relative to another stock's return.

In this paper we study 5 stocks. Therefore, to estimate the variance and

correlation value of the portfolio we use the covariance matrix. The result of the
covariance matrix plays an important role in calculating the correlation coefficient
matrix. From there determine the level of risk when holding a portfolio of stocks
like.

Here is the matrix of covariance we calculated from stock data of 5 companies

over 500 days:

COVARIANCE MATRIX
VIC FPT BID MSN VJC
VIC 0,000374 0,000128 0,000163 0,000142 0,000063
FPT 0,000128 0,000335 0,000189 0,000178 0,000071
BID 0,000163 0,000189 0,000533 0,000181 0,000066
MSN 0,000142 0,000178 0,000181 0,000553 0,000090
VJC 0,000063 0,000071 0,000066 0,000090 0,000268
From the above table, it shows that there is a positive correlation between
stocks. From the covariance matrix, we can calculate the correlation between stocks:

CORRELATION
VIC FPT BID MSN VJC
VIC 1,000000 0,360745 0,364034 0,312160 0,200130
FPT 0,360745 1,000000 0,447358 0,414733 0,237865
BID 0,364034 0,447358 1,000000 0,332630 0,175087
MSN 0,312160 0,414733 0,332630 1,000000 0,232461
VJC 0,200130 0,237865 0,175087 0,232461 1,000000
Relatively low correlation coefficient between stocks indicates that the
correlation between stocks is quite weak and may not be important. So with this
portfolio, investors can reap the benefits of diversification.

With equal equity investment (20% each equity) and the above data we
calculate the annual return of each security as follows:
 Stock Wi Ri δ Rp Risk
VIC 20% 1,842% 1,937%
FPT 20% 65,783% 1,831%
BID 20% 24,825% 2,311% 120,564% 1,3571%
MSN 20% 82,745% 2,354%
VJC 20% 23,202% 1,640%

With a capital investment of 20%/share. Through this table we can see that
MSN is still leading with an average return of 82.75%/year. FPT is lower with an
average return of 65.78%/year. BID and VJC are lower with average return of 24.82%
AND 23.20%/year respectively. And the lowest is VIC with 1.84%/year for 500 days.

According to our calculations, an equally divided portfolio will generate

120.564% return with very low risk of 1.36%. That is a very positive signal.

In 2021 is the year heavily affected by the Covid-19 pandemic, so the retail
market grows rapidly. Besides, the fields of aviation, banking, and technology will
also be areas worth considering for investors. Depending on their risk appetite,
investors can choose reasonable allocations or calculate according to our
recommendations in the next section.