portfolio management - risk & return analysis of … · 2017. 12. 30. · 2016 2656 2352 43.5...

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International Journal of Mechanical Engineering and Technology (IJMET)

Volume 8, Issue 12, December 2017, pp. 663–679, Article ID: IJMET_08_12_069

Available online at http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=12

ISSN Print: 0976-6340 and ISSN Online: 0976-6359

© IAEME Publication Scopus Indexed

PORTFOLIO MANAGEMENT - RISK & RETURN

ANALYSIS OF SELECTED SCRIPTS

Dr. V. Sreehari

Professor, Department of Management Studies,

Vardhaman College of Engineering, Telangana, India

G. Ramesh

Associate Professor, Department of Management Studies,


G. Vinesh Kumar

Assistant Professor, Department of Management Studies


K. Sandeep Kumar

Assistant Professor, Department of Management Studies


ABSTRACT

Portfolio management is a process of encompassing many activities of investing in

assets and securities. It is a dynamic and flexible concept and involves regular and

systematic analysis, judgement and action. A combination of securities held together

will give a beneficial result if they grouped in a manner to secure higher returns after

taking into consideration the risk elements.

Key words: Portfolio Management, Return, Risk, Weights, Correlation.

Cite this Article: Dr. V. Sreehari, G. Ramesh, G. Vinesh Kumar and K. Sandeep

Kumar, Portfolio Management - Risk & Return Analysis of Selected Scripts,

International Journal of Mechanical Engineering and Technology 8(12), 2017, pp.

663–679.

http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=12

1. INTRODUCTION

Portfolios are combinations of assets held by the investors. These combinations may be of

various asset classes like equity and debt and of different issuers like Government bond and

corporate debt or of various instruments like discount bonds, warrants, debentures and Blue

chip equity or scripts of emerging blue chip companies.

Dr. V. Sreehari, G. Ramesh, G. Vinesh Kumar and K. Sandeep Kumar


Portfolio Management is the centralized management of the processes, methods and

technologies used by project managers and project management offices (PMOs) to analyze

and collectively manage current or proposed projects based on numerous key characteristics.

Key capabilities of Portfolio management provides program and project managers in large

program/project-driven organizations with the capabilities needed to manage the time,

resources, skills and budgets necessary to accomplish all inter-related tasks.

The traditional Portfolio Theory aims at the selection of such securities that would fit in

well with the asset preferences, need and choice of investor. Modern Portfolio Theory

postulates that maximization of return and or minimization of risk will yield optimal returns

and choice and attitudes of investors are only a starting point for investment decision and that

vigorous risk-return analysis is necessary for optimization of returns.

2. OBJECTIVES OF THE STUDY

To analyze the risk return characteristics of sample scripts.

To calculate correlation between different stocks.

To ascertain portfolio weights.

To compute portfolio returns and Risks.

To construct effective portfolio to offer maximum return with minimum risks.

3. SCOPE OF THE STUDY

The study covers analysis of selected scripts in diversified areas to study average return,

standard deviation, correlation among scripts, weights, portfolio risk and portfolio return.

4. METHODOLOGY OF THE STUDY

Research methodology is the procedure of collecting, analyzing and interpreting the data to

diagnose the problem and react to the opportunity in such a way where the costs can be

minimized and the desired level of accuracy can be achieved to arrive at a particular

conclusion.

5. SOURCES OF DATA COLLECTION

The methodology adopted or employed in this study was mostly on secondary data collection

i.e.,

Companies Annual Reports

Information from Internet

Information provided by Inter Connected Stock Exchange.

6. LIMITATIONS OF THE STUDY

Construction of Portfolio is restricted to two companies.

Very few and randomly selected scripts are analyzed from BSE Listings.

Data collection was strictly confined to secondary source. No primary data is associated with

the project.

https://en.wikipedia.org/wiki/Contract_management_software

https://en.wikipedia.org/wiki/Project_manager

https://en.wikipedia.org/wiki/Task_%28project_management%29

Portfolio Management - Risk & Return Analysis of Selected Scripts


7. DATA ANALYSIS AND INTERPRETATION

Rate of Return

Rate of Return is calculated by using formula

R =

Where:

R is Rate of Return in percentage

D is Dividend

P1 is End period stock price

P0 is Initial stock price

TCS

Year (P0) (P1) D (P1-P0)

2016 2656 2352 43.5 -304 -9.81

2015 2182 2656 79 474 25.34

2014 1515 2182 32 667 46.14

2013 1221 1515 22 294 25.88

2012 1113 1221 25 108 11.95

AVERAGE RETURN 19.90

BAJAJ AUTO

Year (P0) (P1) D (P1-P0)

2016 2135 2597 55 462 24.22

2015 1924 2135 50 211 13.57

2014 1972 1924 50 -48 0.10

2013 1799 1972 45 173 12.12

2012 1335 1799 45 464 38.13


HDFC BANK

Year (P0) (P1) D (P1-P0)

2016 1052 1206 9.5 154 15.54

2015 676 1052 8 376 56.80

2014 625 676 6.85 51 9.26

2013 518 625 5.5 107 21.72

2012 410 518 4.3 108 27.39




HINDUSTAN UNILEVER

Year (P0) (P1) D (P1-P0)

2016 888 826 16 -62 -5.18

2015 555 888 15 333 62.70

2014 444 555 13 111 27.93

2013 380 444 18.5 64 21.71

2012 282 380 7.5 98 37.41


AMBUJA CEMENT

Year (P0) (P1) D (P1-P0)

2016 260 206 2.8 -54 -19.69

2015 165 260 5 95 60.61

2014 192 165 3.6 -27 -12.19

2013 160 192 3.6 32 22.25

2012 118 160 3.2 42 38.31


Interpretation

Average return of Hindustan Unilever (28.91%) is more compared to companies of TCS,

Bajaj Auto, HDFC Bank and Ambuja Cement. So, it is safe to invest in Hindustan Unilever to

avail greater average return.

Standard Deviation

Standard Deviation of a portfolio is calculated by using formula

Standard Deviation = Variance

Variance 2=

2

Where

n is numbers of years

R is Return &

is Average Return

TCS

Year Return (R) Average Return( )

( ( 2

2016 -9.81 19.90 -29.71 882.62

2015 25.34 19.90 5.44 29.62

2014 46.14 19.90 26.24 688.42

2013 25.88 19.90 5.98 35.75

2012 11.95 19.90 -7.95 63.22

TOTAL 1699.64

Variance 2 =

2

=

Variance 2= 339.92

Standard Deviation = Variance = 339.92 = 18.43



BAJAJ AUTO


( )

( 2

2016 24.22 17.63 6.59 43.43

2015 13.57 17.63 -4.06 16.48

2014 0.10 17.63 -17.52 307.09

2013 12.12 17.63 -5.51 30.33

2012 38.13 17.63 20.50 420.33

TOTAL 817.66

Variance 2=

2

=

= 163.53


HDFC BANK


( )

( 2

2016 15.54 26.14 -10.60 112.37

2015 56.80 26.14 30.66 940.19

2014 9.26 26.14 -16.89 285.14

2013 21.72 26.14 -4.42 19.57

2012 27.39 26.14 1.25 1.56

TOTAL 1358.83

Variance 2=

2

=

= 271.76


HINDUSTAN UNILEVER


( )

( 2

2016 -5.18 28.91 -34.09 1162.44

2015 62.70 28.91 33.79 1141.65

2014 27.93 28.91 -0.99 0.97

2013 21.71 28.91 -7.20 51.90

2012 37.41 28.91 8.50 72.20

TOTAL 2429.16

Variance 2=

2

=

2429.16) = 485.83


AMBUJA CEMENT


( )

( 2

2016 -19.69 17.86 -37.55 1409.90

2015 60.61 17.86 42.75 1827.54

2014 -12.19 17.86 -30.04 902.63

2013 22.25 17.86 4.39 19.30

2012 38.31 17.86 20.45 418.15

TOTAL 4577.53

Variance 2=

2

=

= 915.50




Interpretation

Standard Deviation of Bajaj Auto (12.78) is lower compared to companies of TCS, HDFC

Bank , Hindustan Unilever and Ambuja Cement. So, it is safe to invest in Bajaj Auto as the

deviation is low.

Calculation of Correlation

Correlation is calculated using Correlation Coefficient

Correlation Coefficient =

Where

Covariance (COV ab) =

(RA- A) (RB- B)

n is Number of years

RA- A is Average Return of Script A

RB- B is Average Return of Script B

is Standard Deviation of Script A

is Standard Deviation of Script B

Correlation of TCS with other Companies

TCS (RA) & BAJAJ AUTO (RB)

YEAR (RA- A) (RB- B) (RA- A) (RB- B)

2016 -29.71 6.59 -195.789

2015 5.44 -4.06 -22.086

2014 26.24 -17.52 -459.725

2013 5.98 -5.51 -32.950

2012 -7.95 20.50 -162.975

-873.525

Covariance (COV ab)=

(RA- A) (RB- B) =

(-873.525) =174.705

𝛔a = 18.43 ; 𝛔b = 12.78

Correlation Coefficient=

=

= -0.742

TCS (RA) & HDFC BANK (RB)

YEAR

(RA- A)

(RB- B)

(RA- A) (RB- B)

2016 -29.71 -10.60 314.926

2015 5.44 30.66 166.790

2014 26.24 -16.89 -443.194

2013 5.98 -4.42 -26.432

2012 -7.95 1.25 -9.938

2.152


(RA- A) (RB- B) =

(2.152) = 0.430

𝛔a = 18.43; 𝛔b = 16.48


=

= 0.001



TCS (RA) & Hindustan Unilever (RB)

YEAR

(RA- A)

(RB- B)

(RA- A) (RB- B)

2016 -29.71 -34.09 1012.814

2015 5.44 33.79 183.818

2014 26.24 -0.99 -25.978

2013 5.98 -7.20 -43.056

2012 -7.95 8.50 -67.575

1060.023


(RA- A) (RB- B) =

(1060.023) = 212.005

𝛔a =18.43; b = 22.04


=

= 0.522

TCS (RA) & AMBUJA CEMENT (RB)


2016 -29.71 -37.55 1115.611

2015 5.44 42.75 232.560

2014 26.24 -30.04 -788.250

2013 5.98 4.39 26.252

2012 -7.95 20.45 -162.578

423.595


(RA- A) (RB- B) =

(423.595) = 84.719

𝛔a = 18.43; 𝛔b = 30.25


=

= 0.152

Correlation of Bajaj Auto with other Companies

BAJAJ AUTO (RA) & HDFC BANK (RB)


2016 6.59 -10.60 -69.854

2015 -4.06 30.66 -124.480

2014 -17.52 -16.89 295.913

2013 -5.51 -4.42 24.354

2012 20.50 1.25 25.625

151.558


(RA- A) (RB- B) =

(151.558) = 30.312

𝛔a = 12.78; b = 16.48


=

= 0.144



BAJAJ AUTO (RA) & HINDUSTAN UNILEVER (RB)


2016 6.59 -34.09 -224.653

2015 -4.06 33.79 -137.187

2014 -17.52 -0.99 17.345

2013 -5.51 -7.20 39.672

2012 20.50 8.50 174.250

-130.573


(RA- A) (RB- B) =

(-130.573) = -26.115

𝛔a = 12.78; b = 22.04


=

= -0.093

BAJAJ AUTO (RA) & AMBUJA CEMENT (RB)


2016 6.59 -37.55 -247.455

2015 -4.06 42.75 -173.565

2014 -17.52 -30.04 526.301

2013 -5.51 4.39 -24.189

2012 20.50 20.45 419.225

500.317


(RA- A) (RB- B) =

(500.317) = 100.063

𝛔a = 12.78; 𝛔b = 30.25


=

= 0.259

Correlation of HDFC Bank with other Companies

HDFC BANK (RA) &HINDUSTAN UNILEVER (RB)


2016 -10.60 -34.09 361.354

2015 30.66 33.79 1036.001

2014 -16.89 -0.99 16.721

2013 -4.42 -7.20 31.824

2012 1.25 8.50 10.625

1456.525


(RA- A) (RB- B) =

(1456.525) = 291.305

𝛔a = 16.48; b = 22.04


=

= 0.802



HDFC BANK (RA) & AMBUJA CEMENT (RB)


2016 -10.60 -37.55 398.030

2015 30.66 42.75 1310.715

2014 -16.89 -30.04 507.376

2013 -4.42 4.39 -19.404

2012 1.25 20.45 25.563

2222.280


(RA- A) (RB- B) =

(2222.280) = 444.456

𝛔a = 16.48; 𝛔b = 30.25


=

= 0.892

Correlation of Hindustan Unilever with other Companies

HINDUSTAN UNILEVER (RA) & AMBUJA CEMENT (RB)


2016 -34.09 -37.55 1280.080

2015 33.79 42.75 1444.523

2014 -0.99 -30.04 29.740

2013 -7.20 4.39 -31.608

2012 8.50 20.45 173.825

2896.560


(RA- A) (RB- B) =

(2896.560) = 579.312

𝛔a = 22.04; 𝛔b = 30.25


=

= 0.869

Interpretation

The Correlation between HDFC Bank and Ambuja cement is good compared to relation between other

companies.

8. CALCULATION OF PORTFOLIO WEIGHTS

Portfolio weights are calculated using the formula

Wa=

Wb= 1-Wa

Where

Wa is Weight of Portfolio a

Wb is Weight of Portfolio b

𝛔a is Standard Deviation of Script a

𝛔b is Standard Deviation of Script b

nab is Correlation coefficient of Script a and b



Calculation of Weights of TCS with other Companies

TCS (Wa) & BAJAJ AUTO (Wb)

𝛔a = 18.43, 𝛔b = 12.78, nab = -0.742

Wa =

=

Wa = 0.396

Wb = 1 – (0.396) = 0.604

TCS (Wa) & HDFC BANK (Wb)

𝛔a = 18.43, 𝛔b= 16.48, nab = 0.001

Wa =

=

Wa = 0.444

Wb = 1 - (0.444) = 0.556

TCS (Wa) & HINDUSTAN UNILEVER (Wb)

𝛔a = 18.43, 𝛔b= 22.04, nab = 0.522

Wa =

=

Wa = 0.682

Wb = 1 – (0.682) = 0.318

TCS (Wa) & AMBUJA CEMENT (Wb)

𝛔a = 18.43, 𝛔b= 30.25, nab = 0.152

Wa =

Wa =

= 0.765

Wb = 1 – (0.765) = 0.235

Calculation of Weights of Bajaj Auto with other Companies

BAJAJ AUTO (Wa) & HDFC BANK (Wb)

𝛔a= 12.78, 𝛔b= 16.48, nab = 0.144

Wa =

=

Wa = 0.645

Wb = 1 – (0.645) = 0.355



BAJAJ AUTO (Wa) & HINDUSTAN UNILEVER (Wb)

𝛔a = 12.78, 𝛔b = 22.04, nab = -0.093

Wa =

=

Wa = 0.730

Wb = 1 – (0.730) = 0.270

BAJAJ AUTO (Wa) & AMBUJA CEMENT (Wb)

𝛔a = 12.78, 𝛔b = 30.25, nab = 0.259

Wa =

Wa =

= 0.928

Wb = 1 – (0.928) = 0.072

Calculation of Weights of HDFC Bank with other Companies

HDFC BANK (Wa) & HINDUSTAN UNILEVER (Wb)

𝛔a = 16.48, 𝛔b = 22.04, nab = 0.802

Wa =

Wa =

= 1.113

Wb = 1 – (1.113) = -0.113

HDFC BANK (Wa) & AMBUJA CEMENT (Wb)

𝛔a = 16.48, 𝛔b= 30.25, nab = 0.892

Wa =

Wa =

= 1.582

Wb = 1 – (1.582) = -0.582

Calculation of Weights of Hindustan Unilever with other Companies

HINDUSTAN UNILEVER (Wa) & AMBUJA CEMENT (Wb)

𝛔a = 22.04, 𝛔b= 30.25, nab = 0.869

Wa =

Wa =

= 1.387

Wb = 1 – (1.387) = -0.387

Interpretation

Among all the scripts the weights of TCS & Bajaj Auto (0.396 & 0.604) and TCS

&HDFCBank(0.444 & 0.556) are good compared to all the companies.



9. CALCULATION OF PORTFOLIO RISK

Portfolio risk is calculated using the formula

RP = (𝛔a *Wa) 2 + (𝛔b*Wb)

2 + 2* 𝛔a * 𝛔b*Wa*Wb*nab

Where

Rp is portfolio Risk

𝛔a is Standard Deviation of Script a

𝛔bis Standard Deviation of Script b

Wa is Weight of script a

Wbis Weight of script b

nab is Correlation coefficient of script a & b

Calculation of Portfolio Risk of TCS with other Companies

TCS (a) & BAJAJ AUTO (b):

𝛔a = 18.43, 𝛔b= 12.78, Wa=0.396, Wb = 0.604,nab = -0.742

RP= (18.43*0.396)2+(12.78*0.604)

2+2(18.43)*(12.78)*(0.396)*(0.604)*(-0.742)

RP = 5.408

TCS (a) & HDFC BANK (b):

𝛔a = 18.43, 𝛔b= 16.48, Wa= 0.444, Wb = 0.556, nab = 0.001

RP= (18.43*0.444)2+(12.78*0.604)

2+2(18.43)*(16.48)*(0.444)*(0.556)*(0.001)

RP = 12.291

TCS (a) &HINDUSTAN UNILEVER (b):

𝛔a = 18.43, 𝛔b= 22.04, Wa= 0.682, Wb = 0.318, nab = 0.522

RP= (18.43*0.682)2+(22.04*0.318)

2+2(18.43)*(22.04)*(0.682)*(0.318)*(0.001)

RP = 17.294

TCS (a) & AMBUJA CEMENT (b):

𝛔a = 18.43, 𝛔b= 30.25, Wa= 0.765, Wb = 0.235, nab = 0.152

RP =(18.43*0.765)2+(30.25*0.235)

2+2(18.43)(30.25)(0.765)(0.235)(0.152)

RP = 16.727

Calculation of Portfolio Risk of Bajaj Auto with other Companies

BAJAJ AUTO (a) & HDFC BANK (b):

𝛔a = 12.78, 𝛔b= 16.48, Wa= 0. 645, Wb = 0.355, nab = 0.144

RP= (12.78*0.645)2+ (16.48*.355)

2+2(12.78)(16.48)(0.645)(0.355)(0.144)

RP = 10.773



BAJAJ AUTO (a) &HINDUSTAN UNILEVER (b):

𝛔a = 12.78, 𝛔b = 22.04, Wa= 0. 730, Wb = 0.270, nab = -0.093

RP =(12.78*0.73)2+ (22.04*.27)

2+2(12.78)(22.04)(0.73)(0.27)(-0.093)

RP = 10.589

BAJAJ AUTO (a) & AMBUJA CEMENT (b):

𝛔a = 12.78, 𝛔b= 30.25, Wa= 0. 928, Wb = 0.072, nab = 0.259

RP = (12.78*0.928)2+(30.25*0.072)

2+2(12.78)(30.25)(0.928)(0.072)(0.259)

RP = 12.601

Calculation of Portfolio Risk of HDFC Bank with other Companies

HDFC BANK (a) & HINDUSTAN UNILEVER (b):

𝛔a = 16.48, 𝛔b= 22.04, Wa= 1.113, Wb = -0.113, nab = 0.802

Rp = (16.48*1.113)2+(22.04*(-0.113))

2+2(16.48)*(22.04)(1.113)(-0.113)(0.802)

RP = 16.412

HDFC BANK (a) & AMBUJA CEMENT (b):

𝛔a = 16.48, 𝛔b= 30.25, Wa= 1.582, Wb = -0.582, nab = 0.892

Rp = (16.48*1.582)2+(30.25*(-0.582))

2+2(16.48)(30.25)(1.582)(-0.582)(0.892)

RP = 13.07

Calculation of Portfolio Risk of Hindustan Unilever with other Companies

𝛔a = 22.04, 𝛔b = 30.25, Wa= 1.387, Wb = -0.387, nab = 0.869

Rp = (22.04*1.387)2+(30.25*(-0.387))

2+2(22.04)(30.25)(1.387)(-0.387)(0.869)

RP = 21.203

Interpretation

Among all the companies Risk is low for TCS & Bajaj Auto (5.408). So, it is safe to invest in

TCS & Bajaj Auto as the risk is low compared to all other companies.

10. CALCULATION OF PORTFOLIO RETURNS

Portfolio Return is calculated using the formula

Rp=(RA*WA) + (RB*WB)

Where

Rpis Portfolio return

RAis Return of Script A

RBis Return of Script B

WAis Weight of Script A

WBis Weight of Script B



Calculation of Portfolio Return of TCS with other Companies

TCS (A) & BAJAJ AUTO (B):

RA = 19.90, RB = 17.63, WA = 0.396, WB = 0.604

Rp = (19.90*0.396) + (17.63*0.604) = 18.529

TCS (A) & HDFC BANK (B):

RA = 19.90, RB = 26.14, WA = 0.444, WB = 0.556

Rp = (19.90*0.444) + (26.14*0.556) = 23.369

TCS (A) & HINDUSTAN UNILEVER (B):

RA = 19.90, RB = 28.91, WA = 0.682, WB = 0.318

Rp = (19.90*0.682) + (28.91*0.318) = 22.765

TCS (A) & AMBUJA CEMENT (B):

RA = 19.90, RB = 17.86, WA = 0.765, WB = 0.235

Rp = (19.90*0.765) + (17.86*0.235) = 19.421

Calculation of Portfolio Return of Bajaj Auto with other Companies

BAJAJ AUTO (A) & HDFC BANK (B):

RA = 17.63, RB = 26.14, WA = 0.645, WB = 0.355

Rp = (17.63*0.645) + (26.14*0.355) = 20.651

BAJAJ AUTO (A) & HINDUSTAN UNILEVER (B):

RA = 17.63, RB = 28.91, WA = 0.730, WB = 0.270

Rp = (17.63*0.730) + (28.91*0.270) = 20.676

BAJAJ AUTO (A) & AMBUJA CEMENT (B):

RA = 17.63, RB = 17.86, WA = 0.928, WB = 0.072

Rp = (17.63*0.928) + (17.86*0.072) = 17.647

Calculation of Portfolio Return of HDFC Bank with other Companies

HDFC BANK (A) & HINDUSTAN UNILEVER (B):

RA = 26.14, RB = 28.91, WA =1.113, WB = -0.113

Rp = (26.14*1.113) + (28.91*(-0.113)) = 25.827

HDFC BANK (A) & AMBUJA CEMENT (B):

RA = 26.14, RB = 17.86, WA =1.582 ,WB = -0.582

Rp = (26.14*1.582) + (17.86*(-0.582)) = 30.959

Calculation of Portfolio Return of Hindustan Unilever with other Companies

HINDUSTAN UNILEVER (A) & AMBUJA CEMENT (B):

RA = 28.91, RB = 17.86, WA =1.387 WB = -0.387

Rp = (28.91*1.387) + (17.86*(-0.387)) = 33.186

Interpretation

Return is more in Hindustan Unilever & Ambuja cement (33.186) compared to all other

companies. So, it is safe to invest in Hindustan Unilever & Ambuja cement to gain more

returns.



Comparative Return & Risk of Selected Scripts

Portfolio Return & Risk For Scripts a & b Portfolio Risk Portfolio Return

TCS & Bajaj Auto 5.408 18.529

TCS & HDFC Bank 12.291 23.369

TCS & Hindustan Unilever 17.294 22.765

TCS & Ambuja Cement 16.727 19.421

Bajaj Auto & HDFC Bank 10.773 20.651

Bajaj Auto & Hindustan Unilever 10.589 20.676

Bajaj Auto & Ambuja Cement 12.601 17.647

HDFC Bank & Hindustan Unilever 16.412 25.827

HDFC Bank & Ambuja Cement 13.07 30.959

Hindustan Unilever & Ambuja Cement 21.203 33.186

Interpretation

Among all the companies HDFC Bank & Ambuja cement has less risk & higher return. So, it

is safe to invest in HDFC Bank & Ambuja cement in order to gain more Returns with less

Risk.

11. FINDINGS

Individual returns on the selected stocks of TCS, BAJAJ AUTO, HDFC Bank, Hindustan

Unilever & AMBUJA CEMENT are 19.90%, 17.63%, 26.14%, 28.91% and 17.86%

respectively.

Individual risks on the selected stocks including TCS, BAJAJ AUTO, HDFC Bank, Hindustan

Unilever & AMBUJA CEMENT are 18.43%, 12.78%, 16.48%, 22.04% and 30.25%

respectively

Correlation between all the companies is positive except TCS & Bajaj Auto Stocks and

Hindustan Unilever & BAJAJ AUTO stocks which means most of the combinations of

portfolios are at good position to gain in future.

Weights of TCS & Bajaj Auto (0.396,0.604), TCS & HDFC (0.444,0.556), TCS & Hindustan

Unilever (0.682,0.318) ,TCS & Ambuja Cement (0.765,0.235), Bajaj Auto & HDFC Bank

(0.645,0.355), Bajaj Auto & Hindustan Unilever (0.73,0.27), Bajaj Auto & Ambuja cement

(0.928,0.072) are positive compared to HDFC Bank & Hindustan Unilever (1.113,-0.113),

HDFC Bank & Ambuja Cement(1.582,-0.582), Hindustan Unilever & Ambuja Cement

(1.387,-0.387) are negative. The weight of Scripts are based on the percentage of weights

invested.

Portfolios returns of Hindustan Unilever & Ambuja Cement(33.186%) followed by HDFC

Bank & Ambuja Cement (30.959%), HDFC Bank & Hindustan Unilever (25.827%) TCS and

HDFC Bank (23.369%) stood on the top while Portfolio Returns of Bajaj Auto & Ambuja

Cement (17.647%) is the only combination which stood at the bottom with minimum profits.

Portfolios risk of Hindustan Unilever & Ambuja Cement (21.203%) and TCS & Hindustan

Unilever (17.294%) are very high compared to others while Portfolio risk of TCS & Bajaj

Auto (5.408%) stood at the bottom.

12. SUGGESTIONS

Of the five stocks selected, all the stocks have given positive returns. HDFC Bank and HUL

has been giving good profits of over 25% while the other companies have also given good

returns. All the companies seem to be a good bet for investment.



Comparing the individual risks, HUL and AMBUJA CEMENT are high risky compared to the

other securities like BAJAJ AUTO, and HDFC and it is suggested that the investors should be

careful while investing in high risk securities.

The investors who require average returns with low risk can invest in Hindustan Unilever

Investors are advised to invest in Portfolios of Ambuja Cements & Hindustan Unilever (33%)

and Ambuja Cements & HDFC Bank (31%) which have given the maximum returns.

Low Risk investors are advised to keep away from HUL & AMBUJA CEMENT and

Hindustan Unilever & HDFC Bank and prefer the Portfolios of Bajaj Auto with other

companies which have the least risk.

13. CONCLUSIONS

The main objective of the Portfolio management is to help the investors to make wise choice

between alternate investments without a post trading shares. Any portfolio management must

specify the objectives like maximum returns, optimum Returns, capital appreciation, safety

etc., in the same prospectus.

This service renders optimum returns to the investors by proper selection and continuous

shifting of portfolio from one scheme to another scheme of from one plan to another plan

within the same scheme. “Greater portfolio return with less risk is always is an attractive

combination” for the investors.

REFERENCES

[1] Punithavathy Pandian (2009), Security Analysis and Portfolio Management, Vikas

Publishing House Private Limited, New Delhi.

[2] S. Kevin (2009), Security Analysis and Portfolio Management, Prentice Hall of India,

New Delhi.

[3] Donald E. Fischer, Ronald J. Jordan (2009), Security Analysis and Portfolio Management,

Prentice Hall of India, New Delhi.

[4] Prasanna Chandra (2009), Investment Analysis and Portfolio Management, Tata McGraw

Hill, New Delhi.

[5] S. Raghavan and Dr. M. Selvam, Determinants of Foreign Portfolio Investment and Their

Effects on The Indian Stock Market. International Journal of Management, 8(3), 2017, pp.

105–115.

[6] Hasanudin, Sugeng Wahyudi, Irene Rini Demi Pangestuti., Managing The Pension Fund

To Improve Portfolio Performance: An Empirical Study On Employer Pension Funds In

Indonesia, International Journal of Civil Engineering and Technology, 8(8), 2017, pp.

714–723.

[7] Dr. Vani Kamath and Dr. Roopali Patil, Cost Benefit Analysis of National Pension

Scheme. International Journal of Management, 8 (3), 2017, pp.156-158.

[8] Dr. Varsha Nerlekar and Swapnil Patel, An Empirical Analysis of Inventory Efficiency of

Major Refineries in India. International Journal of Management, 7(7), 2016, pp. 426–432.

[9] A. Ramaraju, Impact of FDI On Stock Market Development: An Empirical Investigation,

International Journal of Management , Volume 2, Number 1, Jan- April (2011)

[10] Benefits of FDI In Indian Retail Sector and Custome r Perception of Organized Retail

Outlets In Hyderabad, K.Venkateswara Raju, Dr. Svss Srinivasa Raju, Dr. D.Prasanna

Kumar, International Journal of Management , Volume 4, Issue 4, July-August (2013), pp.

180-192



[11] http://indiainfoline.com

[12] http://bloomberg.com

[13] http://moneycontrol.com/nifty/nse

[14] http://moneycontrol.com/sensex/bse

[15] http://scribd.com

[16] http://economictimes.indiatimes.com

[17] http://profit.ndtv.com

[18] http://money.rediff.com

http://indiainfoline.com/

http://www.bloomberg.com/

http://www.money/

http://www.scribd.com/

http://economictimes.indiatimes.com/

http://profit.ndtv.com/

http://money.rediff.com/

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