Optimization using Excel
I’m exporting five years of historical price data, monthly, to calculate monthly returns from Yahoo Finance. I from there calculate the average return, annualized, and standard deviation, annualized. I also formulate a covariance matrix using the return data for 39 different stocks. My issue is the price data I extract doesn’t include dividends so my average returns are under stated. Is it okay to use this price data without dividends to calculate standard deviation, correlation and return? I’m assuming no.
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