1“A STUDY ON RISK AND RETURN ANALYSIS OF LISTED STOCKS IN SENSEX WITHSPECIAL REFERENCE TO BOMBAY STOCK EXCHANGE” BY V.RAMACHANDRAN REG.NO:80709601067 Of DEPARTMENT OF MANAGEMENT STUDIES J.J.COLLEGE OF ENGINEERING & TECHNOLOGY AMMAPETTAI TIRUCHIRAPPALLI – 620 009 A PROJECT REPORT Submitted to the FACULTY OF MANAGEMENT STUDIES In partial fulfillment of the requirements For the award of the degree Of MASTER OF BUSINESS ADMINISTRATION JUNE 2011 1 BONAFIDE CERTIFICATE Certified that this project report title “A STUDY ON RISK AND RETURN ANALYSIS OF LISTED STOCKS IN SENSEX WITHSPECIAL REFERENCE TO BOMBAY STOCK EXCHANGE” is the bonafide work of Mr. V.RAMACHANDRAN carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported-herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate. Signature of Internal Guide Signature of Director Signature of External Examiner 1 ACKNOWLEDGEMENT First and foremost I thank the Almighty for the courage and confidence to carry out the project. I express my sincere thanks to Dr. V.SHANMUGHANATHAN, Msc(engg)., Ph.D., Director and Prof. K. Ponnusamy, M.sc., B.L., Chairman of J.J.COLLEGE OF ENGINEERING AND TECNOLOGY-TRICHY for providing me an opportunity to do MBA program in this prestigious institution. I take an immense pleasure to thank our Principal DR.K.RAMSEWHARAN, M.E, Ph.D., for giving me an opportunity to undergo the project I am grateful to express my sincere and deep sense of gratitude to our Advisor Dr. K. ABDULLAH BASHA M.A., M.Phil., Ph.D., for his learned counsel and encouragement throughout my academic career. I express my thanks to Dr SW. RAJA MANOHARANE M.TECH, MBA, PGDMM, PGDCA, SLET, PH.D., Director, Department of Management Studies for his consent and encouragement throughout the project. I extend my gratitude of the internal guide Ms. P. JANET PORTIA MARY B.c., M.B.A., Lecturer, for her valuable guidance and motivation for the completion of the project.. My special thanks to Mr. G.BALAMURUGAN, Manager, BMA WEALTH CREATORS, CHENNAI and other staff members for giving me a golden opportunity to undergo the project in their esteemed organization and the valuable guidance. I owe on affectionate thanks to my beloved Parents who have endured to raise me to this level of education and my friends for the constant help towards the successful completion of the project on time. TABLE OF CONTENT 1 CHAPTER No. PARTICULARS PAGE No. 1 INTRODUCTION BREIF HISTORY OF 30 COMPANIES 2 3 REVIEW OF LITERATURE OBJECTIVES OF THE STUDY SCOPE AND LIMITATIONS OF THE STUDY RESEARCH METHODOLOGY TOOLS USED FOR ANALYSIS DATA ANALYSIS AND INTERPRETATION FINDINGS 4 5 6 SUGGESTIONS CONCLUSION BIBILOGRAPHY ANNEXURE 1 . Average return for the financial year 20072008 Average returns for financial year 20082009 Average returns for financial year 20092010 Standard deviation for the financial year 2007-2008 Standard deviation for the financial year 2008-2009 Standard deviation for the financial year 2009-2010 Beta value for the financial year 2007-2008 Beta value for the financial year 2008-2009 Beta value for the financial year 2009-2010 Alpha value for the financial year 2007-2008 Alpha value for the financial year 2008-2009 Alpha value for the financial year 2009-2010 Correlation coefficient for the financial year 2007-2008 Correlation coefficient for the financial year 2008-2009 Correlation coefficient for the financial year 2009-2010 R square value for the financial year 20072008 R square value for the financial year 2008- . PARTICULARS PAGE NO.1 TABLE NO. .1 ABSTRACT The researcher carried out with the study with the objective of finding out the risk and return of all the stocks in SENSEX. Average return for the financial year 20072008 Average returns for financial year 20082009 Average returns for financial year 20092010 Standard deviation for the financial year 2007-2008 Standard deviation for the financial year 2008-2009 Standard deviation for the financial year 2009-2010 Beta value for the financial year 2007-2008 Beta value for the financial year 2008-2009 Beta value for the financial year 2009-2010 Alpha value for the financial year 2007-2008 Alpha value for the financial year 2008-2009 Alpha value for the financial year 2009-2010 Correlation coefficient for the financial year 2007-2008 Correlation coefficient for the financial year 2008-2009 Correlation coefficient for the financial year 2009-2010 R square value for the financial year 20072008 R square value for the financial year 2008- The researcher carried out the analytical research design using . PARTICULARS PAGE NO.1 Chart NO. Standard Deviation. Scope and Limitations of the study. The tools are Average Return. Beta. Analysis is made on fourth chapter using various tools.com The first chapter deals with Introduction of company and second chapter deals with Review of literature and the third one is Objectives. Correlation Coefficient and R square value. Alpha.e. the results obtained from the study and suggestions given to the investors.bseindia. The final chapter deals with the findings i.1 the secondary data which was downloaded from the website www. . Over the past 133 years. SENSEX.1 INTRODUCTION: THE ORGANIZATION Bombay Stock exchange is the oldest stock exchange in Asia with a rich heritage.B. 1956. BSE is the first Stock exchange in the country which obtained permanent recognition (in 1956) from the government of India under the securities Contracts (Regulation) Act 1956.S. is India’s first stock market index that enjoys an iconic stature.T and Z groups. Deutsche Borse and Singapore Exchange.BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. What is now popularly known as BSE was established as “The Native Share & Stock Brokers’ Association” in 1875. pursuant to the BSE (Corporation and Demutualization) Scheme. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. BSE is now a corporatized and demutualized entity incorporated under the provisions of company Act. With demutualization. Moreover. Earlier an Association of persons (AOP). and is sensitive to market sentiments and market realities. The BSE index. and is tracked worldwide. Today. BSE is the World’s number 1 exchange interms of the number of listed companies and the world’s 5th in transaction numbers. It is an index of 30 stocks representing 12 major sectors. BSE has entered into an index cooperation agreement with Deutsche Borse. BSE offers 21 indices. Apart from SENSEX. There is perhaps no major corporate in India which has not sourced BSE’s services in raising resources from the capital market. as its strategic partners. now spanning three centuries in its 133 years of existence.2007 stood at USD 1. including 12 Sector indices. BSE’s pivotal and pre-eminent role in the development of the Indian Capital Market is widely recognized. 2005 notified by the Securities and Exchange Board of India(SEBI). The SENSEX is constructed on a ‘free.700 listed companies. BSE has two of world’s best exchanges.79 trillion. An investor can choose from more than 4. which for easy reference are classified into A. Barclays Global Investors (BGI) the global .float’ methodology. The market capitalization as on December 31. It migrated from the open outcry system to online screen-based order driven trading system in 1995. 1 leader in ETFs through its isharesA brand has created the isharesA BSE SENSEX India tracker’ which tracks the SENSEX. BSE launched a world wide investor awareness programme. While the Directors Database provides a single – point access to the information on the board of directors of listed companies. It brings to the investors a trading tool that can be easily used for the purpose of investment. it is an amount higher than that of any exchange in the country. SPIcE allows small investors to take a long term view of the market. hedging and arbitrage. it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out a large number of investors. BSE also has a wide range of services to empower investors and facilitate smooth transactions Investor Services: The department of Investor services grievances of investors. It is also the first exchange in India and second in the world to receive Informartion Security Management System Standrards BS 7799-2-2002 certification for its BSE On-line trading system(BOLT) BSE continues to innovate. 1 million towards the investor protection fund. the ICERS facilitates the corporate in sharing with BSE their corporate announcements. It has successfully launched a reporting platformfor corporate bonds in India has christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named BSE Broadcast’ which enables information dissemination to the common man on the street. trading. It has a nation-wide reach with presence in more than 359 cities and towns of India. BSE provides an efficient and transparent market for trading in equity.‘Save Investing in the Stock Market’ under which 264 programmes where held in more then 200 cities. The ETF enables investors in Hong Kong to take an exposure to an Indian equity market. debt instruments and derivatives. . called “SPIcE” is listed on BSE. BSE was the first exchange in the country to provide an amount of Rs. BSE launched the Direactors Database and ICERS(Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in Indian market. In recent times. The first exchange Traded fund (ETF) on SENSEX. BSE has always been at par with the International Standards. BSE is the first exchange in India and the second in the world to obtain an ISO 9001-2000 certifications. The systems has and processes are designed to safeguard market integrity and enhance transparency in its operations. In 2006. whichever way you look at it. The Human Resource Management at BSE has won the Asia-Pacific HRM awards for its efforts in employer branding through talent management at work and excellence in HR through technology drawing from its rich past and is equally robust performance in recent times. It offers over 40 courses on various aspects of the capital market and financial sector. . As a corporate entity. . More than 20. Surveillance: BSE’s On-Line Surveillance system (BOSS) monitors on a real – time basis the price movements .000 Trader workstations located across 359 cities in India. Volume positions and member’s positions and real. Vision “ Emerge as the Indian Stock Exchange by establishing global benchmarks “ The Stock Exchange. AWARDS The world council of corporate governance has awarded the Golden Peacock Global Award for BSE’s initiatives in Corporate Social Responsibility (CSR). BOLT is currently operating in 25.time movements of default risk. BSE Training Institute: BTI imparts capital market training and certification . our new logo reflects our new mission. Mumbai is Bombay Stock Exchange Limited (BSE) a new name and an entirely new perspective .1 The BSE On-Line trading (BOLT): BSE On-Line trading(BOLT) facilitates on=line screen based trading in securities. in collaboration with reputed management institutes and Universities. .000 people have attended the BTI programmes. market reconstruction and generation of cross market alerts. smoother . . a perspective born out of corporatization and demutualization. seamless and efficient . BSE will continue to remain an icon in the Indian Capital Market.2006 and March 31 2007 have been awarded for excellence in financial reporting. . The Annual Reports and Accounts of BSE for the year ended March 31. 000 dealers. The company is largest integrated telecom company in terms of customer base and offers mobile services . BHARTI AIRTEL LIMITED Bharti cement limited is one of the Asia’s telecommunication service providers. 20 sales offices and several zone offices. It has a workforce of about 10. ushering the indigenous Heavy electrical equipment industry in India – a dream that has been more than realized with a wellrecognized track of performance. Broadband & IPTV. Long Distance and Enterprise Services. BSE has been the backbone of the country’s capital markets. BHEL BHEL is the Largest engineering and manufacturing enterprise in India in rhe energy related/infrastructure sector. Airtel offers also mobile services in Srilanka on a state –of-the art 3.. Located in Mumbai.000 persons and a country wide distribution network of over 9.. the financial capital of India. more than 30 Ready mix concrete plants . It is the only cement company that figures in the list of Consumer Super Brands of India. today.1 BSE is Asia’s oldest stock exchange carrying the depth of knowledge of capital markets acquired since its inception in 1875. BREIF HISTORY OF 30 COMPANIES ACC ACC (ACC Limited) is India’s foremost manufacturer of cement and concrete.5 G network. ACC’s operations are spread throughout with 14 modern cement factories . BHEL was established more than 40 years ago. Power generation & . Fixed Line services. ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian Market. DTH. BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz. The company has been earning profits continuously since 1971-72 and paying dividends sice 1976-77. 3. eight services centres and 18 regional offices enable the company to promptly service its customers and provide them with well suitable products. according to the forbes listing of the richest billionaires in 2008. today Grasim businesses has comprise viscose staple fibre (VSF). a flagship of the Aditya Birla Group. Transportation. The company is currently headed by Indian Billionaire Kushal Pal Singh. 1. focusing on Home mortgages. DLF announced its first quarter results ending 30 June 2007. ranks among India’s largest private sector companies .515. DLF DLF Limited or DLF is India’s largest real estate developer based in New Delhi . HDFC’s distribution network spans 243 outlets that include 49 .48 Crore. chemicals and textiles. Telecommunication. with consolidated net turnover of Rs. HDFC Housing Development Financing Corporation or HDFC.170 billion and a consolidated net profit of Rs.98 Crore and PAT at Rs. founded 1977 by Ravi Mauraya and Hasmukhbai Parekh. It is also the second largest producer of caustic soda in India. The DLF Group was founded by Chaudary Raghuvendra Singh in 1946. Industry. In July 2007 . 29 billion. The company reported a turnover of Rs.India. Renewable Energy. systems and services. Has a capacity of 35 million tpa and it is leading cement player in India. is an Indian bank. now stands as the 8th richest man in the world.1 Transmission. Who inherited the company from Chaudary. Starting as textiles manufacturer in 1948. In cement Grasim along with its subsidiary Ultra tech Cement Ltd. Kushal Pal Singh. The wide network of BHEL’s 14 manufacturing divisions. four power sectors regional centres over 100 project sites. sponge iron.120. cement. GRASIM INDUSTRIES LIMITED Grasim industries Limited. Co. and its ADRS on the New York Stock Exchange. Mr. In 2007 Hindustan Unilever was rated as the most respected company in India for 25 years by Business World. ICICI bank has got its equity shares listed on the stock exchanges at Kolkata and Vadodara.485 ATMs and 24 milion customers. It was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan lever Limited through a merger of Lever Brothers. ICICI BANK ICICI bank is India’s largest private sector bank in market capitalization and second in largest overall in terms of assets.000 crores. . and united traders Ltd.Ltd. HINDALCO INDUSTRIES Hindalco Industries is India’s largest Aluminium manufacturing company and is subsiday of the Aditya Birla Group. The company has annual sales of $ 5 billion and employs 13. 22 regional offices and 49 regional processing centres about 4.399 branches.Birla. HDFC’s marketing efforts continue to be concentrated on developing a stronger distribution network. ICICI bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialized subsidiaries and affiliates in the area of Investment banking. Bank has total assets of about USD 100 billion a network of over 1. Mumbai and the National Stock Exchange of India Limited. A metals power house with a turnover of US$14 billion. It is run by one of the World’s youngest billionaires.1 offices of HDFC’s distribution company. HINDUSTAN UNILEVER LIMITED HUL is India’s largest consumer products company and has an annual turnover of over Rs 13. HDFC covers over 90 locations through its outreach programmes.675 people and is listed on Forbes 2000. HDFC sales Private Limited. one of the India’s Leading Business Magazines. The company was renemed in late June 2007 to “ Hindustan Unilever Limited”. Hindalco is the world’s largest aluminium rolling company and one of the biggest producer of primary aluminium in Asia.M.K. IN addition. Hindustan Vanaspati Mfg. 000 professionals. Henning Holck-Larsen and soren Kristaian Toubro. Beginning with the import of machinery from Europe. the company sets global engineering benchmarks interms of scale and complexity.the company rapidly took an engineering construction assignments of increasing sophistication. trade and logistics. Infosys was founded on July 2. It employs over 20.7 billion Mahindra group an automotive. is an Indian conglomerate with a turnover of US $ 4.the name was changed from Mahindra . It ranks in pre-tax profit among India’s Private sector corporations. Ghulam Mohammad returned to Pakistan and became the nation’s first finance minister. Its annual revenues for the fiscal year 2007-2008 exceeded US$4 billion with a market capitalization of over US$14 billion. The company is headed by Yogesh Chander Deveshwar.00.India. L&T Larsen & Toubrowas founded in Bombay in 1938 by two Danish engineers. Hence.1981 in pune by N. Marayana Murthy and six others. Today. It is one of the India’s largest IT companies with over 1. ITC is independent of Imperial tobacco.R. farm equipment.000 people at more than 60 locations across India and is listed on Forbes 2000. It has 9 department centres in India and over 50 offices worldwide.market. IT and infrastructure conglomerate.1 INFOSYS TECHNOLOGIES LIMITED Infosys technologies limited is a multinational informational technology seervices company headquartered in Bangalore. financial services. ITC LIMITED ITC Limited which previously stood for Imperial Tobacco company of India Limited. after. MAHINDRA & MAHINDRA LIMITED Mahindra & Mahindra limited is part of US $6. automotive components. The company was setup in 1945 as Mahindra & Mohammed.75 billion. Later after the partition of India. It is a leading four-Wheeler automobile manufacture in South Asia. Indian government holds 74.9 billion and profit of US$4. It was the first company in India to produce and sell more than a million cars.1975. Intaially setup set up to manufacture general. OIL AND NATURAL GAS CORPORATION LIMITED Oil and natural gas corporation limited incorporated on June 23 1993 is an Indian public sector petroleum company. Mahindra & Mahindra was first known for assembly of the iconic jeep in India. It is a Fortune Global 500 company ranked 335th and contributes 77% of India’s Crude oil production and 81% of India’s natural Gas production. It was setup as a commission on August 14.85 billion for . Suzuki Motor Corporation of Japan holds a majority stake in the company. though the actual production commenced in 1983 with the maruti 800.1956. NTPC LIMITED NTPC Limited is the largest power generation company in India. It is an Indian Public sector listed on the Bombay stock exchange at present Government of India holds 89. It is largely credited for having brought in an automobile revolution to India.purpose utility vehicles. MARUTI SUZUKI INDIA LIMITED Maruti Suzuki India Limited is publicly listed automaker in India. construction and operation of power generating plants and providing consultancy to power utilities in India and abroad.5% of its equity. It was founded on November 7. NTPC’s core business is engineering.14% equity stake in this company. It is the highest profit making corporation in India. its only competitor – The Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. based on Suzuki Alto kei car which at the time was only the modern car available in India.1 & Mohammed to Mahindra & Mahindra in 1948. Maruti udyog was established in February 1981. Forbes 2000 for 2008 ranked it 411th in the world. RELIANCE INDUSTRIES LIMITED Reliance Industries Limited is India’s largest private secor conglomerate with an annual turnover of US$ 35. being ranked at 206th position(2008). The company’s corporate headquarters is situated in sector 24. RELIANCE INFRASTRUCTURE Reliance infrastructure formely known as Relainace energy and prior to that as Bombay Suburban Electric supply (BSES). The company is the sole distributor of electricity to consumers in the suburbs of Mumbai. Ranbaxy went public in 1973.77 percent of the company which accounts for more than 1. According to National Stock Exchange data. It uses CDMA2000 1x technology for its existing CDMA mobile services and GSM-900/GSM-1800 technology for its existing/Newly launched GSM services.36 billion shares. RANBAXY LABORATORIES LIMITED Ranbaxy Laboratories Limited is India’s largest pharmaceutical company. It is the flagship of Reliance-Anil Dhirubhai company comprising of power. is accompany under the Reliance – Anil Dhirubhai Ambani group (1) banner. Noida. one of the India’s Largest conglomerates. Ranbaxy was started by Ranjit Singh and Gurbax singh in 1937 as a distributor for a Japanese Company Shionogi. Though the company’s oil-related operations forms the core of its business.1 the fiscal year ending in March 2008 making it one of the India’s private sector Fortune Global 500 companies. financial services and telecom initiatives of the reliance ADAG. It also . It is ranked among the top 10 generic operations worldwide. it has diversified its operations in recent years. It was founded by the industrialist Dhirubhai Ambani in 1966. Anil Dhirubhai company controls 66. The CEO of the company is Malvinder Mohan Singh. Ranbaxy exports its product to 125 countries with ground operations in 46 and manufacturing facilities in seven countries. It is an Indian telecommunications company. The company is headed by Anil Ambani. Incorporated in 1961. RELIANCE COMMUNICATIONS Reliance Communications along with Relainace telecom and flag telecom is part of Reliance Communications Ventures. Its products include copper cathodes and cast copper rods including 11mm and 12 mm rods used in the transformer industry and 8 mm rods used by the wires and cables industry with applications in housing wires. gastroenterology . transmission and distribution business in other parts of Maharashtra . neurology. SUN PHARMACEUTICAL Sun pharmaceutical is an International pharmaceutical company based in Mumbai.1 runs power generation. The company entered in to commercial power generation business by setting up a large scale 2. phosphoric acids. Europe.Gujarat and Maharashtra. It is also measured by the number of Branch offices and employees the second largest bank in the world The bank traces its ancestry back through the Imperial Bank of India to the founding in 1806 of the bank of Calcutta. In 2008 the Government took over the stake by the reserve bank of India. Asia and worldwide. STERLITE The company engages primarily in the production of copper in India. SUN pharma was a start up company with five products. ingredients to be used in finished products. The Government of India nationalized the Imperial Bank of India in 1955. In addition sterlite produces various chemical products such as acids. hydro fluo silicic acids and granulated slag. SBI provides a range of banking products through its Vast network in India and overseas. making it is the oldest commercial bank in the Indian Subcontinent. Orissa and a wind energy project at Karnataka. electric cables and telecom cables. India. Established in 1983. including psychiatry. Sun manufactures both pharmaceuticals and active pharmaceutical in essence . including products aimed at NRIs. totaling 110.400 MW coal based independent thermal power plant on Jharsuguda. STATE BANK OF INDIA State bank of India is the largest bank in India. with the Reserve bank of India taking a 60% stake and renamed it the state bank of India.4 MW. cardiology. diabetology. Its products are in several therapeutic areas. TATA MOTORS LIMITED . It takes many generic and brand name drugs that are distributed in the United States. respiratory and orthopedics.Goa and Andhra Pradesh. TATA POWER Started as the Tata Hydroelectric power supply company in 1911. Ranked 315th on FortuneGlobal 500. The company is listed on the National Stock Exchange and Bombay Stock Exchange of India. Tata power has a presence in thermal. transmission and retail. solar and wind areas of power generation. It is India’s largest provider of Information technology and business process outsourcing services.1.2008. when the company began manufacturing locomotives. Tata motors was established in 1945. it is an amalgamation of two entities: TATA Hydroelectric power supply company Limited is India’s largest private sector electricity generating company with an installed capacity of over 2300 MW.it is based in Jamshedpur.110 crore and net profit of Rs 12. The OICA ranked it as the world’s 20th largest automaker.1 Tata motors Limited formerly known as TELCO( Tata Engineering and Locomotive Company) is a multinational corporation headquartered in Mumbai. Its main plant is located in Jamshedpur. TATA CONSULTANCY SERVICES LIMITED Tata consultancy services Limited is an Indian software services and consulting company. It is the second largest private sector steel company in India in terms of domestic production. India. India. It is a part of Tata Group of Companies.hydro. It is India’s largest passenger automobile and commercial vehicle manufacturing company. TATA STEEL Tata steel formerly known as TISCO and Tata Iron and Steel company Limited is the world’s sixth largest steel company.Benz AG. Part of the Tata Group and one of the world’s largest manufacturers of commercial vehicles. Tata steel is also India’s second-largest and second most profitable company ion private sector with consolidated revenues of Rs. based on figure 2006. Jharkhand with its recent acquisitions the company has become a multinational with operations in Various countries.32.TCS is part of tone of India’s largest and oldest conglomeratesm Tata group whichhas . which ended in 1969. The company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler. The company is a pioneer in the Indian Power Sector.350 crore during the year ended March 31. with an annual crude steel capacity of 28 million tones. engineering. financial services. but since then has diversified into the information technology. It was founded as Vegetable Oil company. Jaiprakash Associates company has. the company got its present name. Herepositioned it and transformed Wipro(Western India Vegetable products Ltd) into a consumer goods company that produces hydrogenated cooking oils/fat company. WIPRO TECHNOLOGIES Wipro technologies is a corporation based in India. Jaiprakash Associates executed many as 13 hydro-power projects at the same time. These projects are in 6 Indian States and also in the country of Bhutan. The group was established in 1972 and has a turnover of more than Rs.000 million. . materials. hydro-power and river valley projects. Azim a graduate in Electrical engineering from Stanford University. took an leadership of the company at the age of 21. wax and tin containers and later setup wipro Fluid power to manufacture hydraulic and Pneumatic cylinders in 1975. Wipro started as a vegetable oil company in 1947 from an old mill founded by Azim Premji’s Father. leading to the production of 10. engineering and health care businesses. government and health care. chemicals . When his father died in 1966. customer care. laundry soap. manufacturing. 30. JAIPRAKASH ASSOCIATES Jaiprakash Associates was previously known as Jaiprakash Industries but after its merger with Jaypee Cement. for over 3 decades been in business and is aleader in building on the basis of turnkey. Jaiprakash Assocites Ltd is under the Jaypee Group which is an Industrial Infrastructure group in India.290 MW power. lighting.1 interests in areas such as energy relecommunications. Year : 1996. . at the twin issues of whether property should from part of a well-diversified domestic portfolio. such as holding of equities. Conventional wisdom suggest that a well-diversified portfolio should contain assets spread across different markets. and also provides evidence that securitized property markets are segment internationally. Using the relatively new technique of co integeration analysis. Looks. in particular. Tittle: Evidence of segmentation in domestic and international property markets. John Okunev.1 REVIEW OF LITERATURE The risk/return trade off is a perennial problem of portfolio managers. Portfolio diversification strategies should be such that investment are held in market that are well insulated from each other so that the effect of market fluctuation in one market a re not transferred to the other. Author(s) : Patrick J.Wilson . Journal: Jurnal of property finance. while an increasingly accepted notion is that portfolios should also be diversified internationally. The current paper continues this inquiry. provides evidence from the USA the UK and Australia that domestic real estate and equities market are segmented. Research over the last few years has. at least sought confirmation. Page: 78_97 Article type: Research paper. if not questioned this conventional wisdom. and whether property should from part of a port folio that is diversified internationally. bond and property. return and investment horizon relationships. This berish phase has resulted in considered decline in the value of the equity portfolio of the investors. For example. Unless we are able to clearly delineate the risk. In relatively poorer economies. capital is scarce and it is of paramount importance that households saving are carefully channelized into investment avenues.) and 143 right issues index showing sideways movement in the range of 2800-3700 during the period 2001-2003.86bn. It is not clear if these policies are in the right direction. policy decision have been taken in India permitted banks and pensions funds to invest in equity markets. expects for a brief period during the year 2000 the markets have remined subdued.1 Indian equity market witnessed bullish trends during 1989_1994 drawing a large number of retail investors into equity investment. it would be difficult for the investors to make informed investment decisions. However. During the period 1997_2002. The study is expected to be of use in analyzing policies that guide equity investment.316. Many eminent opinion are not completely convinced . it has been difficult for them to convince the investors about t he attractively of equity investment as long-term proposition. While mutual funds and money managers attempted to convey the risk return profile of equity asset to the investors. This is significantly lower than the trends observed during previous periods. there were just 302 public issues (rs. The US equities furnished risk premium of about 6% over the 1889-1978 period (mehra and Prescott. the standard deviation of the annual return from stocks was18% (Campbell 1995). it is seen that as holding period increasing t he stocks appear to offer investor excessive return over longer investment horizons. They found that real return are the .1 about the safety of parking bank and pensions money.1985) . The paper provides a therotical frame work for examination the relationship between risk return and investment horizon. even in small amount. in equity. siegal (1992) showed that over the period 1802-1990. In fact.For example. It furture attempts to collect the available evidence in the Indian equity market to make inference about the risk return relationship over varied investment horizons. period. in the period 1802-1997. Standard deviation of real returns follow declining patterns when measured over long holding periods. It is useful to understand the historical trends in equity investment as it would help in making informed long-term asset allocation decisions. the range for stock returns was 18% for holding period of 20 year and 8% for holding period 10 years . As the investment horizon increases. the real compounded annual return on equity in USA delivered a real return on 67% while in their worst single year they return –39% for a range of 160% . Jorian and goetzmann (1992) studied thirtynine markets over long time horizons. 12% for holding period of 20 years and 8% for 30 years. Siegel (1992) noted that equity appeared to to be best route to long-term wealth accumulation. the dispersion in stock return decreses. 1 highest in the USA. Journal: Journal of the Academy of Business and Economics Year: January 2003. • To find out whether the stock return is independent of the market return . • • To find out the variability of return of the stock in the SENSEX. the the German market showed only 1.04%. They concluded that the hignhg US equity premium seemed to an exceptions rather then the rule. .52% and the pre-war –3.91% equity return during most of last century. OBJECTIVES : • To calculate daily securities return of the stock in SENSEX and daily market return. Markets such as Portugal. chile and peru did not do well over long periods of analysis. Author : G. For example. To measures t he relationship between the stock return and the index return .SETHU & RACHANA BALD Article type: Research paper. The story is similar for japan where the post-war return on equity was 5. .. The study is restricted only for 3 years due to the time constraints.1 • To measures the nature and the extent the relationship between the stock return and stock market index return in a particular period. Only daily stock prices have been taken. PERIOD OF STUDY Study is restricted for 3 years. arise along with SENSEX. Websites etc. LIMITATIONS OF THE STUDY • The study was conducted by the researcher only with those scrips that has been listed in the SENSEX. Source of data Data are collected from Journals. • This study is an attempt by the researcher to find out the pattern of stock risk. • • Only the daily stock prices have been taken for the study. SCOPE OF THE STUDY • The major scope of the study is to find risk and return of all the stocks in SENSEX. HDFC 7. BHARTI AIRTEL 4. ACC 2. BHEL 3. HINDUSTAN UNILEVER LIMITED 10.ICICI BANK 11. DLF LIMITED 5. HINDALCO INDUSTRIES 9. The companies in SENSEX are as follows 1.INFOSYS . HDFC BANK 8. GRASIM INDUSTRIES 6.1 RESEARCH METHODOLOGY Analytical Research “The researcher has to use facts or information already available and analyze this to make c critical evaluation of the material” is known as Analytical Research. 1 12.ITC 13.JAI PRAKASH 14.LARSEN & TOUBRO 15.MAHINDRA & MAHINDRA LIMITED 16.MARUTI UDYOG 17.NTPC 18.ONGC 19.TATA POWER 20.TATA STEEL 21.TATA MOTORS 22.RELIANCE INDUSTRIES 23.RELIANCE INFRASTRUCTURE 24.RELIANCE COMMUNICATION 25.RANBAXY 26.STERLITE 27.SUN PHARMACEUTICALS 28.WIPRO 29. TCS 30.SBI ANALYSIS AND INTERPRETATION Table No. 4.1.1: Showing the Average Returns of BSE index and various companies for the financial year 20072008. 1 S.NO. COMPANY NAMES AVERAGE RETURN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 0.068329 0.108745094 (0.09344) (0.08726) 0.044384 0.120547 0.176357 (0.05806) (0.0797) 0.12353 (0.05385) 0.174308 0.076998 0.241536 0.035908 (0.13394) 0.096439 (0.06707) (0.0304) (0.02365) 0.004643 0.271219 0.008518 0.033295 (0.07224) 1 Fig No. 4.1.1 Showing the Average return of BSE index and various companies for the financial year 2007-2008. 1 Inference The average daily return is high (0.27) for Bharti Airtel among the SENSEX stocks when compared to the aerage daily market return(0.068) Table No. 4.1.2: Showing the Average Returns of BSE index and various companies for the financial year 20082009. 25966 0.0008 0.09763 0.12667 0.56975 0.4165 0.0938 0.26379 0.11668 0.17218 0.1 S.0836 -0.185984282 0.10123 0.09945 0.00023 0.NO.07093 0.23322 -0. COMPANY NAMES AVERAGE RETURN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 0.06718 0.074 0.15041 0.20061 -0.15643 0.1018 0.06564 .26221 0. 1 . 56) for Reliance Infrastructure among the SENSEX stocks when compared to the average daily market return(0. Inference The Average daily security return is high(0.: Showing the Average Returns of BSE index and Various companies for the financial year 2008-2009.1 Fig 4.2.099) .1. 14094 2.235 3.NO.73513 3.46245 2.57815 2.28727 .35413 2.73043 4.55386 2. COMPANY NAMES STANDARD DEVIATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 1.38615 3.12919 2.91326 2.55612 2.9014 4.24066 2.29986 2.00183 2.31825 6.19509 2.601956457 3.34302 2.83697 3.75484 2.1 S.17329 2.30916 2. 3 Showing Average Return of BSE index for the year 20092010. Fig 4.1.3 Showing the Average Returns of BSE index and Various companies for the financial year 2009-2010.1. .1 Table 4. Table No.1: Showing the standard deviation of BSE index and various companies for the financial year 2007-2008.099) .56) for Reliance Infrastructure among the SENSEX stocks when compared to the average daily market return(0.1 Inference The Average daily security return is high(0.2. .4. 070909 2.541127 2.775642 2.361979 2.777577 2.204673 2.063806 3.215084 3.269172 6. COMPANY NAMES STANDARD DEVIATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 1.189043 3.635149 2.497882 3.194508 2.794212 2.587421 2.753027 2.896855 .424806 1.886108 2.864587 2.313518545 2.560107 2.886949 2.345412 3.NO.358761 3.1 S. 1: Showing the Standard Deviation of BSE index and various companies for the financial year 2007-2008.1 Fig No. 4. .2. The standard deviation helps to measure the variability of return.2.86) expected return is stable compared to the stocks in the Sensex.2: Showing the Standard Deviation of BSE index and various companies for the financial year 2008-2009. 4. Table No. The variability in return includes systematic and unsystematic risks.1 Inference: Sun pharmaceuticals (1. . 601956457 3.00183 2.14094 2.31825 6.55612 2. COMPANY NAMES STANDARD DEVIATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 1.1 S.35413 2.55386 2.29986 2.9014 4.34302 2.73513 3.57815 2.19509 2.28727 .12919 2.91326 2.73043 4.30916 2.17329 2.24066 2.235 3.NO.75484 2.38615 3.83697 3.46245 2. 1 Fig 4.2: Showing the Standard deviation of BSE index and Various companies for the financial year 2008-2009 .2. 3: Showing the standard deviation of BSE index and various companies for the financial year 2009-2010.4. Table No. .1 Inference Ranbaxy(2.12) expected return is stable compared to the stocks in SENSEX. The standard deviation helps to measure the variability of return.2. The Variability in return includes systematic and unsystematic risks. 047214 4.146273 4.665799 4.859338 2.247368 2.231593 3.161043 4. COMPANY NAMES STANDARD DEVIATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BSE INDEX HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS 2.014447 2.562481 3.846351 3.585679 4.904894 2.999255 3.75703 4.165325 5.839698 3.1 S.858428 3.536886 4.NO.007978 3.310105 5.24517 3.327897 6.511178 .275058 2.37752 3. 1 . 3. Table 4.2.1 Showing the Beta values between BSE index various companies for the financial year 2007-2008 . 4.1 Fig No. The standard deviation helps to measure the variability of return.23) expected return is stable compared to the stocks in the Sensex. Inference: Hindustan unilever limited(2.3: Showing the Standard Deviation between BSE index and various companies for the financial year 2009-2010. COMPANY NAMES BETA VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.082765 0.09066) 0.09536) (0.272186 (0.095712 (0.129077 (0.1 S.0303 (0.NO.11126 0.05625) 0.173919 (0.7575) (0.01949) 0.176461 0.108568 (0.08714) 0.0026) 0.12723) 0.06794) (0.038868 0.034754 (0.07357) (0.244509 0.02628) (0.02286) (0.35279) . 1: Showing the Beta return of BSE index and various companies for the financial year 2007-2008.3.1 Fig No. . 4. .09) moves in the opposite direction to the market return.1 Inference: Negative beta values indicates that the stocks return moves in the opposite direction to the market return.9% Table No. The stock return of sterlite provides a return of 0. 4.3. In the year 2007-2008. the sterlite(0.2: Showing the Beta values between BSE index and various companies for the financial year 2008-2009. 05293 0.12897 -0.37488 0.NO.09675 0.0147 .0562 -0.0376 0.1 S.02228 0. COMPANY NAMES BETA VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC -0.01809 0.098 -0.10255 -0.16747 0.05906 -0.036 0.13374 -0.0624 -0.10174 0.04523 0.16737 0.09788 0.21404 0.0545 0.1074 0.1308 0.2471 01. 3.1 Fig 4.: Showing the Beta values of BSE index and Various companies for the financial year 2008-2009 .2. .24) moves in the opposite direction to the market return. the stock return of reliance infrastructure (0. 4.1 Inference Negative beta values indicates that the stocks return moves in the opposite direction to the market return.3: Showing the Beta values between BSE index and various companies for the financial year 2009-2010. In the year 2008-09.3. Table No. 101428 -0.124899 0.126225 -0.00063 0.126225 0.044892 0.083909 0.04503 0.1 S.076427 -0.00277 0.117597 0.0036 0.121152 0.098871 0.105239 -0. COMPANY NAMES BETA VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.1446 0.201508 0.040813 -0.039006 0.101977 .063677 -0.03349 0.06246 0.NO.00885 0.158142 0. 1 . Jai Prakash stock is less volatile compared to the market. It is inferred that one percent change in market index return causes 0. the stock return of RIL(0. 4.14) moves in opposite direction to the market return.3: Showing the Beta values of BSE index and various companies for the financial year 2009-2010. Table No. 4. Inference Negative Beta value indicates that the stocks return moves in the opposite direction to the market return.1 Fig No. In the year 2008-09. .20 percent change in the Jai Prakash stock return.3.4.1: Showing the Alpha values between BSE index and various companies for the financial year 20072008. 003 0.0126 0.40661 0. COMPANY NAMES ALPHA VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.11693 0.0883 0.08459 0.18956 0.09427 -0.05548 -0.08394 0.08515 0.25367 0.59432 0.0678 0.116 .1 S.06268 0.25634 0.22347 -0.11559 -0.NO.13711 0.15269 0.0262 -0.06035 0.16255 0.2544 0. 1 Fig 4.4.2: Showing the Alpha values between BSE index and Various companies for the financial year 2008-2009 . ONGC.3: Showing the Alpha values between BSE index and various companies for the financial year 2009-2010.4. Tata power. 4. Sterlite has yielded good profitable return for the year 2007-08.1 Inference: Positive alpha values would yield profitable return. It is inferred that Reliance infrastructure. Table No. . 01193 -0.17089 -0.09342 -0.5506 -0.12318 -0.13403 -0.06134 -0.43224 -0.02605 -0.35875 -0.3939 0.15249 -0.00728 -0.21229 -0.NO.09528 -0.21819 -0.01324 -0.1 S. COMPANY NAMES ALPHA VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC -0.11267 .1018 -0.15437 -0.31038 -0.038101 -0.31004 -0.031117 -0.05994 -0. 1 . . Inference: Positive alpha values would yield profitable return. NTPC. DLF has yielded good profitable return for the year 2009-10. L & T. It is inferred that Hindustan Unilever Limited. 4.1: Showing the Correlation values between BSE index and various companies for the financial year 20072008.1 Fig No.4.3: Showing the Alpha Values of BSE index and various companies for the financial year 2009-2010.5. Table 4. . 08608 0.00382 0.05432 0.0228 0.72525 0.092269 0.02614 0.119702 0.07233 0.03456 0.048179 0.00824 0.018562 0.04559 0.01839 0.0353 .1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC Maruti Udyog L&T 0.068326 0.206885 0.06942 0.05504 0.03937 0.04704 0.16229 0.031191 0.124704 0.017452 0.001979 0. 1 Fig No. . 4.5.1: Showing the Coefficient values between BSE index and various companies for the financial year 2007-2008. . It is inferred that AIRTEL.2: Showing the Correlation values between BSE index and various companies for the financial year 2008-2009. 5.1 Inference: Positive alpha values would yield profitable return. RELIANCE INDUSTRIES. ICICI BANK has yielded good profitable return for the year 20072008. RELIANCE COMMUNICATION. Table No 4. 0143 0.07331 0.04392 .1213 -0.133 0.07152 0.1086 0.11369 0.10241 -0.10398 0.06865 -0.03998 0.11497 0.11139 0.0421 0.08365 0. COMPANY NAMES CORRELATION VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC -0.08134 -0.0302 -0.0626 0.01333 0.0342 -0.02907 0.044 -0.0263 0.1 S.00979 0.NO. 1 . 5. .3 :Showing the Correlation values between BSE index and various companies for the financial year 2009-2010.2. Table 4. Inference There is a relationship between Tata steel stock return to the SENSEX return.: Showing the Correlation values between BSE index and Various companies for the financial year 2008-2009.1 Fig 4.5. 083765 0.000346 0.109525 0.034234 0.090645 0.NO.062319 -0.067047 .094417 0.103996 0.1 S.003897 0.074868 -0.080532 0.02301 0.101087 0. COMPANY NAMES Correlation Coefficient 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.125242 0.05192 0.10811 0.027843 0.016784 0.07575 0.07425 0.006595 0.038751 -0.01601 0.055345 0. 4. 5. .2: Showing the correlation coefficient between BSE index and various companies for the financial year 2009-2010.1 Fig No. 1 Inference There is a relationship between BHEL stock return to the SENSEX return.1 Showing the R square values between BSE index and various companies for the financial year 20072008 .6. Table 4. 002212515 0.002951158 0.000972867 0.000338159 0.007409469 0. COMPANY NAMES R SQUARE VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.005231744 0.000344566 0.00006785 0.005259838 0.14328563 0.004819278 0.008513526 0.04656137 0.002321201 0.00030459 0.00302995 0.00207813 0.042801403 0.001194161 0.1 S.00051966 .000000145 0.000263375 0.NO.000683458 0.001550037 0.00000391 0. .1: Showing the R Square value of BSE index and various companies for the financial year 2007-2008.4 .6.1 Fig No. 1 Inference The Interpretation is that 4. 4.2: Showing the R square values between BSE index and various companies for the financial year 2008-2009.6.28 percent of variation in Airtel stock’s return is explained by the variation in SENSEX index return. . Table No. 01179 0.00662 0. COMPANY NAMES R SQUARE VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.01293 0.0016 0.007 0.00069 0.00512 0.01322 0.00018 0.00091 0.00193 .01241 0.00084 0.1 S.01049 0.00471 0.01081 0.NO.01769 0.00392 0.000096 0.00177 0.00537 0.0147 0.0002 0.00193 0.00117 0. 1 . Table 4.7 percent of variation in Tata Motors stock’s return is explained by the variation in Sensex index return.: Showing the R square values between BSE index and Various companies for the financial year 2008-2009 Inference: The Interpretation is that 1.2. .3 Showing the R Square values between BSE index and various companies for the financial year 20092010.6.6.1 Fig 4. 008217 0.005738 0.001502 0.005513 0.011688 0.0000435 0.004495 .000256 0.0000152 0.010815 0.003884 0.NO.010219 0.008914 0.003063 0.000282 0.000529 0.011996 0.005605 0.001172 0.00000012 0.000775 0.015686 0.007017 0. COMPANY NAMES R SQUARE VALUES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HDFC BANK Hindalco Industries Hindustan Unilever Limited Grasim Industries Mahindra & Mahindra Limied ICICI Bank Infosys ITC Jai Prakash Ranbaxy Reliance Communication Reliance Infrastructure Reliance Industries State Bank of India Sterlite Sun pharmaceuticals Tata Motors Tata Power Tata Steel Wipro Airtel ACC BHEL TCS HDFC 0.1 S.002696 0.006485 0. Inference .3: Showing the R square Value of BSE index and various companies for the financial year 2009-2010.6. 4.1 Fig No. ✔ There is a close relationship between AIRTEL stock’s return is explained by the variation in SENSEX index return. ✔ Reliance Infrastructure has provided higher returns among the other stocks in the year 2008-09. .1 The interpretation is that 1. ✔ When comparing the Sensex companies stock’s the standard deviation of Ranbaxy is higher in the year 200809.5 percent of variation in BHEL stocks return is explained by the variation in SENSEX index return. FINDINGS ✔ Bharti Airtel has provided higher returns among the other SENSEX stocks in the year 2007-08. Hindustan Unilever limited. NTPC.DLF has yielded good profitable return for the year 2009-10. ✔ Positive alpha value would yield profitable return. Beta value of Jai prakash is higher than the other stocks in the Sensex in the year 2008-09.1 ✔ Positive alpha values would yield profitable return. L&T. Tata power. Sterlite has yielded good profitable return for the year 2008-09. ✔ ✔ Hindustan Unilever Ltd is higher in the year 2009-10. ONGC. Reliance infrastructure. . He should be careful in the timings of the purchase and sale of the stock. ✔ The investor should be prepared to hold the stock for a period of time to reap the benefits of the rising trends in the market. Also.1 SUGGESTIONS ✔ Investor in general would analyze the risk factors and have a thorough knowledge of the risk which helps him to plan his investment in the such a manner as to minimize the risk associated with investments. ✔ Another way to avoid the risk is to have an investment in short term security and to avoid long term investment. ✔ It is suggested that the investors can invest in the shares that earn high average return. the investors can invest . ✔ The calculation of standard deviation would yield the variability of the return. if there is inconsistency in the earnings it is better to avoid it. Speculation involves higher risk to get return on the other hand investment involves no such risks and returns will be fair. . An investor is satisfied from the reasonable return from investment in shares. An investor is satisfied from the reasonable return from investment in shares. CONCLUSION In India most of the industries require huge amount of investments. Funds are raised mostly through the issue of share. company progress. The investors should keenly watch the situation like market price. An investor can succeed in his investment only when he is able to select the right stocks. The investors are motivated to buy the shares from the stock market either for speculation or investments. economy.1 in the companies which involves less risk and which moves tandem with the market. .1 returns and the risk involved in a company’s share price before taking decision on a particular stock purchase.
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