The IBM historical data is below:
The HP data is below:
We are using Open Prices for our calculations (look at MS Excel file). The further calculations are processed in Excel file and commented in Word file.
Then, we calculate the historical monthly returns of these stocks using the adjusted closing prices from yahoo using monthly return =(Pricemonth2 – Pricemonth1) / Pricemonth1. After which, find the average monthly return.
After this we are able to calculate the mean monthly return. Just finding the average value for both data sets.
The same we do for standard deviations.
The mean values