A STUDY ON RISK AND RETURN ANALYSIS OF SELECTED FINANCIAL SERVICES COMPANIES LISTED ON NSE

Sushma K S, Charithra C M, Dr. Bhavya Vikas

Abstract


The security market is very dynamic and volatile in nature, where prediction plays a pivotal role for an investor to invest in this market. Risk and return are two sides of a same coin, where both the aspects influence each other for an investment. Hence, understanding the risk involved in the investment helps to maximize returns. This study helps the investors to examine and compare the assessments along with the market and to identify the company which would be preferable to invest based on their risk-taking ability. The primary objective of the study was to assess the risk and return of the eight NSE listed financial services companies along with a secondary objective to compare individual company stock volatility before and after the event of demonetization. The tools and techniques used for analysis were Mean, Standard deviation, Beta, Correlation, Covariance and T-test. Analysis was done by using the closing prices of each month for all the selected companies (Bajaj Finserv, HDFC, ICICI, Axis, Cholamandalam investment and finance, State bank of India, Mahindra & Mahindra, Max finance services) for a specified time period. The findings of the study were that Bajaj Finserv had the highest returns amongst the selected eight companies and the volatility of all the selected eight companies had no difference before and after the event of demonetization. The overall study suggested that investors should always be ready to face any unforeseen events. To be on a safer side and to minimize the severity of loss during such events, various preventive measures like assessing the risk and return should be done well in advance.

Keywords


Beta, Correlation, Covariance, Standard Deviation, T-test, Volatility.

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