Individual 4 international financial market - Essay Example

Mean is often used to determine the expected future returns of mutual funds since it is the best estimate that can be used from the past data. Resources such as NASDAQ stock prices or Yahoo finance are used to provide to help project the future returns of securities. As long as any positive trend or negative trend is noted and taken into consideration, the use of historical data is therefore appropriate in predicting future mutual fund performance. We can also use the mean to project the future and also deliver the obligatory caveat that past returns are not necessarily indicative of future returns.

Discussion The mean return is used to analyse the current market performance of the business and to make future projection. The expected mean is sometimes appropriate best estimate available of future returns, where the actual return is likely to be equal to the expected return. Due to this reason investors would prefer to have an idea of how precise their estimates might be. To assist in quantifying the managers and investors estimates, standard deviation and variance are always preferred to be used.

Standard deviation is the measure of variability which is also used as the standard measure of the total risk of individual assets and portfolio assets. It measures how far from the expected return the actual return might be. The two companies discussed has the same positive return but their level of risk as measured by the variance cannot be seen to be the same. ConocoPhillips (COP) It is a multinational energy corporation with its headquarters located in Texas in the United States. The company is viewed as one of the largest independent pure play exploration and production and it is also one of the big fortune 500 companies.

The company was founded in 1875 as the continental oil and Transportation Company. The company have gone through different stages to reach this far. It is considered the top performing company financially in the NASDAQ financial market. Most of financial analysts use standard deviation when working with historical returns since they are deemed to be samples unless 100% of the data points are used in the calculation. The company recorded a negative average mean of -5.64%. Even though the company is the best performing in the current stock market its long term financial plan has failed and they have recorded a loss.

On the other hand the company strategy for the upcoming trade is more profitable as shown by their projected return shown by the standard deviation measurement that have indicated a positive percentage of 4.41%. The variance of the company stock also shows a positive percentage of 19.46%, therefore showing that the company obligation to meet long term goals is positive. Dr. Reddy's Laboratories This is an international pharmaceutical company that is based in Hyderaband, Andhra Pradesh in India.

The company was found by Dr Anji Reddy who had been working in a publicly owned Indian drugs pharmaceutical limited. The company manufactures and markets a wide range of pharmaceuticals in India and overseas, with over 90 different types of medication and 60 active pharmaceutical ingredients, for drug manufacture, diagnostic kits, critical care, and biotechnology products. The historical performance of the company has indicated a good financial market. The result of the return from the past 10 month’