Journal of Commerce and Accounting Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Comparative Risk-returns Analysis of Stocks in the Indian Stock Market


Affiliations
1 Research Scholar, University School of Business, Chandigarh University, Mohali, Punjab, India
2 Associate Professor, University School of Business, Chandigarh University, Mohali, Punjab, India
     

   Subscribe/Renew Journal


The broad objective of this paper is to examine the returns and the risk associated with selected securities in the Indian securities market. The fluctuation of individual securities was found out. A sample of 50 companies were drawn from the companies listed in BSE in ten different sectors; five from each, representing the energy, materials, metal – non-ferrous, healthcare, banking, information technology, capital goods, finance, Indian infrastructure, and oil & gas sectors. The study was conducted for a period of five years, commencing from 1 January 2016 to 31 December 2020. The average returns of these selected securities were calculated, and their returns fluctuations on a monthly basis (using MS Excel function – average and variance, respectively), to find whether securities with high fluctuations resulted in high returns and vice-versa. Then every company’s returns were compared with their respective sectors’ S&P BSE Index to analyse whether there is a significant difference in returns (using F-test). The result of the analysis carried out showed that the securities which fall under the low risk categories have sometimes performed better than securities which fall under high risk securities, but it was the high risk securities that gave more returns on average, during the period 2016-2020, but only to some extent. Ten stock returns were found to be significantly different than the index returns. The report provides an insight and could be helpful to any rational investor, fund managers, and academicians in general.

Keywords

BSE Index, Securities, Risk and Returns, Indian Stock Market
Subscription Login to verify subscription
User
Notifications
Font Size


  • Avramov, D. (2002). Stock return predictability and model. Journal of Financial Economics, 64, 423-458.

  • Balaji, C., Kusuma, G. D. V., & Kumar, B. V. (2018). Risk and return analysis of equity shares of selected companies in automobile industry. Asian Journal of Multi-Disciplinary Research, 4(2), 37-42. doi:http://dx.doi.org/10.20468/ajmdr.2018.02.09

  • Bantwa, A., & Ansari, F. U. (2019). Risk return analysis of equity stocks: A study of selected Indian IT companies. MUDRA: Journal of Finance and Accounting, 6(1), 31-44. doi:https://doi.org/10.17492/mudra.v6i1.182822

  • Campbell, J. Y., & Viceira, L. M. (2005). The term structure of the risk-return trade-off. Financial Analysts Journal, 61(1), 34-44.

  • Charithra, C. M., Sushma K. S., & Vikas B. (2019). A study on risk and return analysis of selected financial service companies listed on NSE. International Education & Research Journal, 5(7), 3-7.

  • Gautami S., & Kalyan, N. B. (2018). A comparative study on risk & returns analysis of selected stocks in India. International Journal of Management and Economics Invention, 4(5), 1730-1736. doi:10.31142/ijmei/v4i5.03

  • Ghysels E., Santa-Clara P., & Valkanov (2005). There is a risk-return trade-off after all. National Bureau of Economic Research, 509-548. doi:https://doi.org/10.1016/j.jfineco. 2004.03.008

  • Islam, K. U. (2017). Do macroeconomic variables impact the Indian stock market? Journal of Commerce & Accounting Research, 5(3), 10-17. doi:https://doi.org/10.21863/jcar/ 2016.5.3.031

  • Jermsittiparsert, K. (2019). Risk-return through financial ratios as determinants of stock price: A study from ASEAN region. Journal of Security and Sustainability Issues, 9(1), 199-210. doi:https://doi.org/10.9770/jssi.2019.9.1(15)CITATIONS

  • Karthika, P., & Karthikeyan, P. (2011). A study on comparative analysis of risk and return with reference to selected stocks of BSE Sensex index, India. Research Journal of Social Science & Management, 1(4), 101-114.

  • Kour, M. (2020). An empirical investigation of relationship between ethical ideology and demographic factors of bank managers. Drishtikon: A Management Journal, 11(2), 23-40.

  • Mall, P., & Gupta, K. (2019). Impact of merger announcements on stock returns of acquiring firms: Evidence from India. Journal of Commerce & Accounting Research, 8(1), 46-53.

  • Mangala, D., & Kumari, P. (2015). Corporate fraud prevention and detection: Revisiting the literature. Journal of Commerce & Accounting Research, 4(1), 35-45.

  • Panchal, N. (2018). Risk-return relationship analysis of selected stocks using CAPM. International Journal of Engineering & Science Research, 8(5), 14-23.

  • Patjoshi, P. (2020). Comparative risk return analysis of Bombay stock market with selected banking stocks in India. International Journal of Management & Social Sciences, 4(1), 192-200. doi:https://doi.org/10.21013/jmss.v4.n1.p18

  • Rao, M. S., Podile V., & Navvula, D. (2020). Risk and return analysis of selected Nifty banking stocks. European Journal of Molecular & Clinical Medicine, 7(4), 1010-1018.

  • Samadder, S., & Bhunia, A. (2018). Integration between Indian stock market and developed stock markets. Journal of Commerce & Accounting Research, 7(1), 13-23.

  • Santhosh, S., & Rajani, K. G. (2019). A study on comparative analysis of risk and return of selected stocks with special reference to CNX Bank Nifty. Journal of Advanced Research in Dynamical and Control Systems, 11(4 Special Issue), 2339-2345.

  • Savsani, M., & Rathod, U. (2019). Comparative risk return analysis of Bombay stock market with selected banking stocks in India. International Journal of Scientific Research in Science and Technology, 4(5), 908-916. doi:https://doi.org/10.13140/RG.2.2.25717.83689

  • Sreehari, V., Ramesh, G., & Kumar, G. V. (2017). Portfolio management - Risk & returns analysis of selected scripts. International Journal of Mechanical Engineering and Technology (IJMET), 8(12), 663-679.

  • Subramanyam, P., & Kalyan, N. B. (2018). A study on risk & return analysis of selected securities in India. International Journal of Engineering Technologies and Management Research, 5(4), 79-86. doi:https://doi.org/10.29121/ijetmr.v5.i4.2018.211

  • Suresh, A. S., & Prakash, S. L. (2018). Study on comparison of risk – Return analysis of public and private sector banks listed on Bank Nifty. Journal of Business Management and Economic Research, 2(1), 1-8.

  • Suryanarayana, K. S. (2012). A study on risk & return relationship – An analysis on selected companies in Muscat securities market. SSRN Electronic Journal, 1-13. doi:https://doi.org/10.2139/ssrn.1764263

  • Tripathi, V., & Kumar, A. (2015). Do macroeconomic variables affect stock returns in BRICS markets? An ARDL approach. Journal of Commerce & Accounting Research, 4(2), 1-15.

  • Venkateswararao, M., & Ramababu, V. (2020). A study on risk & return analysis of selected securities in India. Journal of Information Storage and Processing Systems, 19(3), 35-45.

  • Vikkraman, P., & Varadharajan, P. (2009). A study on risk & return analysis of automobile industry in India (2004-2007). Journal of Contemporary Research in Management, 35-40.


Abstract Views: 146

PDF Views: 0




  • Comparative Risk-returns Analysis of Stocks in the Indian Stock Market

Abstract Views: 146  |  PDF Views: 0

Authors

Shefali
Research Scholar, University School of Business, Chandigarh University, Mohali, Punjab, India
Manjit Kour
Associate Professor, University School of Business, Chandigarh University, Mohali, Punjab, India

Abstract


The broad objective of this paper is to examine the returns and the risk associated with selected securities in the Indian securities market. The fluctuation of individual securities was found out. A sample of 50 companies were drawn from the companies listed in BSE in ten different sectors; five from each, representing the energy, materials, metal – non-ferrous, healthcare, banking, information technology, capital goods, finance, Indian infrastructure, and oil & gas sectors. The study was conducted for a period of five years, commencing from 1 January 2016 to 31 December 2020. The average returns of these selected securities were calculated, and their returns fluctuations on a monthly basis (using MS Excel function – average and variance, respectively), to find whether securities with high fluctuations resulted in high returns and vice-versa. Then every company’s returns were compared with their respective sectors’ S&P BSE Index to analyse whether there is a significant difference in returns (using F-test). The result of the analysis carried out showed that the securities which fall under the low risk categories have sometimes performed better than securities which fall under high risk securities, but it was the high risk securities that gave more returns on average, during the period 2016-2020, but only to some extent. Ten stock returns were found to be significantly different than the index returns. The report provides an insight and could be helpful to any rational investor, fund managers, and academicians in general.

Keywords


BSE Index, Securities, Risk and Returns, Indian Stock Market

References