Hello, I have been struggling

Go to finance yahoo’s page on any stock, then go to historicaldata and select time period of 2 years, along with frequency asmonthly, and download it as an excel sheet. Make sure no stocksplits or bonuses were given out for that time period (otherwisestock prices would need to be adjusted).

For your convenience, i’ve done Amazon, Microsoft, Twitter,Facebook and Apple.

For portfolio construction, you need to assign equal weights bymultiplying each stock’s price by 0.2 and adding the sum ofeach.

The return on each month is given by (price in month – price inpreceding month) / price in preceding month.

Once the returns are calculated in percentage terms, just runthe standard deviation formulas on each stock along with theportfolio.

See how it looks in excel:

So the standard deviation of returns of portfolio is 5.42% whilethe average of the stocks individually gives 7.17%.

Thus we can conclude that diversification leads tolowering of risk.

Sources