An approach to performance comparison: bond weighted portfolio over stock weighted portfolio

The subject of this thesis, investigate whether bond weighted portfolio yields higher than stock weighted portfolio while having lower risk and offering an alternative investment strategy to investors. Investors are investing in anticipation of future returns by examining historical data of financial assets. In addition to the return on investment, the most important thing for investors is to minimize the risks they will face. A global portfolio was created to prove the hypothesis. Data of the assets included in the portfolio is taken from the Thomson Reuters data system and with those data, standard deviation was calculated and correlation matrix was created to examine the relationship between the financial assets. Also Sharpe ratio is calculated for measure the risk adjusted performance of the portfolio. Results of the analyzes show that the return of bond weighted portfolio is higher than the return of stock weighted portfolio. Moreover, the risk of bond weighted portfolio have is lower than the risk of stock weighted portfolio. Keywords: Modern Portfolio Theory, Sharpe Ratio, Portfolio Management, Risk