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Should your fund invest in Bitcoin?

📖 Background

You work as an analyst at an investment fund in New York. Your CFO wants to explore if it is a good idea to invest some of the fund's assets in Bitcoin. You have to prepare a report on this asset and how it compares to the stock market in general.

Should your fund invest in Bitcoin?

📖 Background

You work as an analyst at an investment fund in New York. Your CFO wants to explore if it is a good idea to invest some of the fund's assets in Bitcoin. You have to prepare a report on this asset and how it compares to the stock market in general.

import pandas as pd
bitcoin = pd.read_csv('./data/bitcoin-usd.csv', parse_dates=['date'])
bitcoin.head()
sp500 = pd.read_csv('./data/sp500.csv', parse_dates=['date'])
sp500.head()
monthly_data = pd.read_csv('./data/monthly_data.csv', parse_dates=['date'])
monthly_data.head()

💪 Competition challenge

Create a report that covers the following:

  1. How does the performance of Bitcoin compare to the S&P 500 and the price of gold?
  2. Analyze Bitcoin's returns and volatility profile. Do you believe it could help improve the performance of a portfolio? Do you believe Bitcoin could be used as a hedge versus inflation?
  3. The CFO is looking to lower volatility in the fund. Explore building a portfolio using some or all of these assets. Make a recommendation that minimizes overall risk.

🧑‍⚖️ Judging criteria

CATEGORYWEIGHTINGDETAILS
Recommendations35%
  • Clarity of recommendations - how clear and well presented the recommendation is.
  • Quality of recommendations - are appropriate analytical techniques used & are the conclusions valid?
  • Number of relevant insights found for the target audience.
Storytelling30%
  • How well the data and insights are connected to the recommendation.
  • How the narrative and whole report connects together.
  • Balancing making the report in depth enough but also concise.
Visualizations25%
  • Appropriateness of visualization used.
  • Clarity of insight from visualization.
Votes10%
  • Up voting - most upvoted entries get the most points.

✅ Checklist before publishing into the competition

  • Rename your workspace to make it descriptive of your work. N.B. you should leave the notebook name as notebook.ipynb.
  • Remove redundant cells like the judging criteria so the workbook is focused on your story.
  • Make sure the workbook reads well and explains how you found your insights.
  • Check that all the cells run without error.

⌛️ Time is ticking. Good luck!

Table of Contents

Introduction 1.1 Background and Purpose 1.2 Scope of the Report

Bitcoin vs. S&P 500 and Gold 2.1 Historical Performance Comparison 2.2 Volatility Analysis 2.3 Key Takeaways

Bitcoin's Returns and Volatility 3.1 Historical Returns 3.2 Volatility Profile 3.3 Portfolio Potential

Bitcoin as a Portfolio Asset 4.1 Diversification Benefits 4.2 Risk Considerations 4.3 Recommendations

Bitcoin as an Inflation Hedge 5.1 Relationship with Inflation 5.2 Viability as a Hedge

Minimizing Portfolio Risk 6.1 Portfolio Risk Assessment 6.2 Diversification Strategies 6.3 Recommended Actions

Conclusion 7.1 Summary of Key Insights 7.2 Investment and Risk Management Outlook

Bitcoin's Role in Modern Investment Portfolios

1. Introduction

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