📊 Portfolio Analysis – Python Project
A practical financial analytics project focused on portfolio evaluation, asset return analysis, and risk measurements using Python.
🚀 Project Overview
This project applies essential analytical techniques for investment portfolios, including:
✅ Time series processing ✅ Daily returns calculation ✅ Correlation analysis ✅ Portfolio performance evaluation ✅ Risk metrics ✅ Asset allocation visualization
It is structured into three exercises, each focusing on a key concept in financial data analysis.
📂 Datasets Used
The project uses three CSV files:
File - Description asset_price_data.csv - Daily prices of financial assets portfolio_weights.csv - Daily allocation weights for each asset asset_information_data.csv - Asset categories (family/group)
✅ Exercise 1 — Data Loading & Normalization
Load asset prices
Plot price evolution
Normalize all assets to start at the same value (baseline = 1)
Purpose: Enables comparison across different assets regardless of original price scale.
✅ Exercise 2 — Daily Returns & Correlation Analysis
Compute percentage daily returns
Generate the correlation matrix
Create scatter plots comparing asset behaviors
Purpose: Helps identify relationships, diversification potential, and co-movement between assets.
✅ Exercise 3 — Portfolio Performance Analysis
Load and visualize portfolio weights
Compute cumulative portfolio returns
Calculate annualized return
Calculate annualized volatility (based on 261 trading days)
Visualize allocation by asset family/category
Purpose: Understand portfolio structure, long-term behavior, and risk-adjusted consistency.
📊 Key Visualizations
The notebook includes:
📈 Price time series 📉 Normalized price chart 🔁 Correlation matrix ⚫ Scatter plot between two assets 📘 Portfolio cumulative returns 🟩 Asset weight area plot 🟦 Asset weight distribution grouped by category
These plots help build a comprehensive understanding of portfolio dynamics and asset interactions.
📈 Metrics Calculated ✅ Daily Returns
Percentage change between consecutive days.
✅ Cumulative Returns
Full growth of the portfolio across the entire period.
✅ Annualized Return
Performance normalized to yearly equivalence.
✅ Annualized Volatility
Risk measurement scaled to yearly frequency.