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TABLE OF CONTENTS

1. INTRODUCTION
2. WHAT IS ETHICAL INVESTING
3. PERSPECTIVE
4. SETTING INVESTMENT GOALS
5. INVESTMENT STRATEGIES
6. THE BUSINESS CYCLE
7. RISK & RETURN
8. ASSET ALLOCATION
9. ASSET CLASSES
10. MODERN PORTFOLIO THEORY
11. INVESTING HIEROGLYPHICS
12. INVESTOR'S TOOL CHEST

11.   INVESTING HIEROGLYPHICS

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Standard Deviation: This calculation is a measure of risk. It is used to measure the variation, or deviation, of a security, or group of securities, relative to an average or expected return. It is mainly used when a portfolio is not diversified. Standard deviation is an absolute measure of risk, meaning that it takes into consideration both systematic and unsystematic risk. The forms of risk will be covered in Section VI of this guide.

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​Beta: This calculation is another measure of risk, but only takes into consideration the systematic risk when measuring the variation, or deviation, of a security or group of securities relative to an average or expected return. This calculation is mainly used after a portfolio is diversified.

​A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicate's that the security's price will be more volatile than the market. - Investopedia

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Semivariance: A similar calculation to standard deviation, but rather than measuring variation of above and below an average or expected return, it just measures the variation below the average return. This measurement is used because an investor often doesn't wish to take into account the variation of a group of securities or funds that are above the average return, rather he/she is only concerned with variation that falls below the average return.

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Correlation Coefficient: The correlation coefficient is a measure that determines the degree to which two variables movements are associated. The range of values for the correlation coefficient is -1.0 to 1.0. A correlation of -1.0 indicates a perfect negative correlations, while a correlation of 1.0 indicates a perfect positive correlation. -Investopedia

When it comes to investing, the correlation coefficient measures the correlation between a given security to another security.

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Coefficient of Determination: The statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a market or benchmark index. ​-Referred from Investopedia

The range of this coefficient is from 0 to 100. The closer it is to 100 the more the movement of the given security is correlated to that of the market or benchmark.

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Covariance is a measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means returns move inversely. -Investopedia

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