This series of mini projects explored various aspects of financial analysis.
In the first project, two stock portfolios were created—one low-risk and diversified with a volatility of 19% and an expected return of 82%, and another high-risk, tech-focused portfolio with 33% volatility and a 130% return.
The second project tested the normality of stock log returns, revealing discrepancies between histogram fitting and statistical tests, likely due to volatile stock behavior.
The third project analyzed call and put options under the Black-Scholes model, showing how call option sensitivity changes with time and spot price, particularly exhibiting a sigmoid response around the strike price.
Finally, the fourth project dealt with hedging under variable volatility, demonstrating that while hedging can align simulated prices with Black-Scholes predictions under constant volatility, real-world variable volatility causes persistent deviations even with frequent hedging.