Compare the Differences in Returns and Standard Deviations of Three Equities

Analysis of Returns and Standard Deviations

The three sets of data pertain to the 5-year performance of three distinct equities, SPY, Netflix, and KO. When compared to Netflix and KO, SPY has the lowest average monthly return of -3.62% but the greatest annualized return of 9.45%. Netflix had the best one-year return of 89.89%, but it also had the greatest monthly standard deviation of 6.92%. KO had the lowest one-year return (-0.78%), the lowest monthly standard deviation (1.20%), an annualized return of 7.55%, and a standard deviation of 4.16%.

Risks and Rewards in Investment

Larger profits on investment frequently come at a higher risk. Before making investing selections, an investor should examine their risk tolerance and investment objectives. Netflix not only has the best returns but also the highest standard deviation, implying more volatility and risk. SPY offers lower returns but also reduced risk, while KO offers intermediate returns but also moderate risk.