In this video I will give you some guidance on hints on how to tackle the final project and the general
assumption and requirements are that you have successfully mastered the content of part 1 and Part 2
as you will be asked here to apply and combine most of the things that you have learned before.
So you should have some Solid Panda's coding skirts now and also some background knowledge and finance
and investments that are actually the hard skills required in this case study but similar to the real
world it's only 50 percent of the deal and the other 50 percent are good judgment and that you can apply
your hard skirts to different cases.
So let's go to our case here.
And it's actually our first day as the financial advisor in a company that manages the portfolios of
high net worth individuals.
So that's wealth.
The private persons and your first task is to optimize the portfolio of Mary Johnson an independent
physician who recently retired so far Mary's strategy was pretty simple.
She holds the five highest valued stocks in the healthcare sector and that approach is obviously not
really in line with modern portfolio theory and your task is to convince her that it might be better
to diversify her stock portfolio and that some other stocks and sectors
but first of all you have to analyze the past performance of our portfolio and as a very first step
you need to get to the stock tickers of the five highest valued healthcare stocks and you can certainly
find them in the listings data set.
Then next thing you need to rebuild and analyze a strategy for the past 22 years.
Period.
By creating an appropriate index and you might gather the data from Yahoo Finance then as a next step
you are asked to verify her statement.
So for investment periods of six years or longer.
I never lost money with my portfolio.
Is she right next you need to analyze and compare the performance of her large cap or health care portfolio
with other sectors for the most recent four year period and you should also create an index of price
chart.
Then step 5.
You need to calculate and compare annualized risk and return and also the sharp ratio and then step
6.
This is the most critical part here.
So here you have to educate marry that holding in diversified portfolio is beneficial as you can diversify
and systematic risk.
And here it might be best to assimilate many random portfolios.
And finally and step seven.
You need to identify those sectors to add to marriage portfolio that fits and to have revisited strategy
so a sectors most recent that far should be positive.
And the beta should be below 1.
So marry a favor see a defensive stocks and sectors and you can get some more guidance here.
So here are some code fragments.
So for example for plotting
so that's the final project and I hope you have fun with it.
And if you have some difficulties you can also have a look at these solutions notebook or these solutions
video.
So have fun and take care.