G. Manasa Yadav

A
SYNOPSIS REPORT
RISK AND RETURN ANALYSIS
AT
HDFC BANK LIMITED
PROJECT SYNOPSIS SUBMITTED FOR
MASTER OF BUSINESS ADMINISTRATION
Department of Business Administration

Submitted
By
G. MANASA YADAV
H.T.NO: 1415-21-672-099
PENDEKANTI INSTITUTE OF MANAGEMENT

IBRAHIMBAGH
(Affiliated to Osmania University-2021-2023).

INTRODUCTION
RISK-RETURN ANALYSIS
A risk-return analysis is analyzes the trade-off of some measure of risk and some measure of
return. Risk-Return Analysis opens the door to a groundbreaking four-book series giving
readers a privileged look at the personal reflections and current strategies of a luminary in
finance. This first volume is Markowitz's response to what he calls the "Great Confusion"
that spread when investors lost faith in the diversification benefits of MPT during the
financial crisis of 2014. It demonstrates why MPT never became ineffective during the crisis,
and how you can continue to reap the rewards of managed diversification into the future.
Economists and financial advisors will benefit from the potent balance of theory and hard
data on mean-variance analysis aimed at improving decision-making skills.
Investors are risk averse; i.e., given the same expected return, they will choose the investment
for which that return is more certain. Therefore, investors demand a higher expected return
for riskier assets. Note that a higher expected return does not guarantee a higher realized
return. Because by definition returns on risky assets are uncertain, an investment may not
earn its expected return.
A portfolio is a collection of assets. The assets may be physical or financial like

Shares, Bonds, Debentures, Preference Shares, etc. The individual investor or a fund manager
would not like to put all his money in the shares of one company that would amount to great
risk. He would therefore, follow the age old maxim that one should not put all the eggs into
one basket. By doing so, he can achieve objective to maximize portfolio return and at the
same time minimizing the portfolio risk by diversification.
⮚ Portfolio management is the management of various financial assets which comprise

the portfolio.
⮚ Portfolio management is a decision – support system that is designed with a view to

meet the multi-faced needs of investors.
⮚ According to Securities and Exchange Board of India Portfolio Manager is defined as:
“Portfolio means the total holdings of securities belonging to any person”.
NEED & IMPORTANCE OF STUDY:
A risk-Return analysis has emerged as a separate academic discipline in India.

Portfolio theory that deals with the rational investment decision-making process has now
become an integral part of financial literature.
Investing in securities such as shares, debentures & bonds is profitable well as

exciting. It is indeed rewarding but involves a great deal of risk & need artistic skill.
Investing in financial securities is now considered to be one of the most risky avenues of
investment. It is rare to find investors investing their entire savings in a single security.
Instead, they tend to invest in a group of securities. Such group of securities is called as
PORTFOLIO. Creation of portfolio helps to reduce risk without sacrificing returns.
Portfolio management deals with the analysis of individual securities as well as with the
theory & practice of optimally combining securities into portfolios.
The modern theory is of the view that by diversification, risk can be reduced. The
investor can make diversification either by having a large number of shares of companies in
different regions, in different industries or those producing different types of product lines.
Modern theory believes in the perspective of combinations of securities under constraints of
risk and return.
OBJECTIVES OF THE STUDY:
⮚ To study the investment pattern and its related risks & returns In the Housing
Development Finance Corporation Limited (HDFC).
⮚ To find out optimal portfolio of The Housing Development Finance Corporation

Limited (HDFC), which gave optimal return at a minimize risk to the investor in
HDFC.
⮚ To see whether the portfolio risk is less than individual risk on whose basis the
portfolios are constituted.
⮚ To see whether the selected portfolios is yielding a satisfactory and constant return to
the investor.
⮚ To understand, analyze and select the best portfolio.
SCOPE OF STUDY:
This study covers the Markowitz model. The study covers the calculation of
correlations between the different securities in order to find out at what percentage funds
should be invested among the companies in the portfolio. Also the study includes the
calculation of individual Standard Deviation of securities and ends at the calculation of
weights of individual securities involved in the portfolio. These percentages help in
allocating the funds available for investment based on risky portfolios.
RESEARCH METHODOLOGY:
DATA COLLECTION METHODS:
The data collection methods include both the primary and secondary collection
methods.
Primary collection methods:
This method includes the data collection from the personal discussion with the authorized
clerks and members of the HDFC financial services.
Secondary collection methods:
The secondary collection methods includes the lectures of the superintend of the department
of market operations and so on., also the data collected from the news, magazines and
different books issues of this study Superintend
SAMPLE SIZE:
This project comprises a comparative study on Risk and Return Analysis with respect to
HDFC for 5 years spanning from 2016 to 2021.
STATISTICAL TOOLS:
● Return:
Return = Dividend + (Ending Price-Beginning price)

------------------------------------------------------- * 100
Beginning Price
● Average:
Average (R) = ∑ R / N
● Variance:
Variance = 1/n-1 ∑ (R-R)2

● Standard Deviation
Standard Deviation = Variance
● Co-variance:
n
Co-variance (COVAB)=1/n ∑ (RA-RA) (RB-RB)
t=1
● Correlation-Coefficient:
Correlation-Coefficient (PAB) = COV AB / (Std. A) (Std. B)
PERIOD OF STUDY:
The period of study is 45 days.
LIMITATIONS OF THE STUDY
1. Construction of Portfolio is restricted to two companies based on Markowitz
model.
2. Very few and randomly selected scripts / companies are analyzed from BSE
listings.
3. Data collection was strictly confined to secondary source. No primary data is
associated with the project.
4. Detailed study of the topic was not possible due to limited size of the project.
5. There was a constraint with regard to time allocation for the research study i.e. for
a period of two months.
BIBLIOGRAPHY
Books& Articles:
● Muhopadhyay, Debabrata., & Sarkar, Nityananda (2011). Long-Run Predictability in
the Indian Stock Market. Finance India, 25(3), 817-834.
● Roselee, S. S., & Fung, S. H. (2009). Does Size Really Matter? A Study of Size Effect
and Macroeconomic Factors in Malaysian Stock Returns. International Research
Journal of Finance and Economics, 24, 101-116.
● Tursoy, Turgut., Gunsel, Nil., & Rjoub, Husam. (2008). Macroeconomic Factors, the
APT and the Istanbul Stock Market. International Research Journal of Finance and
Economics, 22, 49-57.
● Acikalin, Sezgin., Aktas, Rafet., & Unal, Seyfettin. (2008). Relationship between
stock markets and macroeconomic variables: An empirical analysis of the Istanbul
Stock Exchange. Investment Management and Financial Innovations, 5(1), 8-16.
● Investing management By Puthi Sing. Security analysis and portfolio management By

Punithvathy Pandiyam
NEWS PAPERS:
● NSEindia.com
● Investopedia.com
● Glossary.reuters.com
● Capitalmarket.com
● Answers.com

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RISK AND RETURN ANALYSIS

HDFC BANK LIMITED

PROJECT SYNOPSIS SUBMITTED FOR

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

PENDEKANTI INSTITUTE OF MANAGEMENT

(Affiliated to Osmania University-2021-2023).

A portfolio is a collection of assets. The assets may be physical or financial like

⮚ Portfolio management is the management of various financial assets which comprise

⮚ Portfolio management is a decision – support system that is designed with a view to

A risk-Return analysis has emerged as a separate academic discipline in India.

Investing in securities such as shares, debentures & bonds is profitable well as

⮚ To find out optimal portfolio of The Housing Development Finance Corporation

⮚ To understand, analyze and select the best portfolio.

Return = Dividend + (Ending Price-Beginning price)

Variance = 1/n-1 ∑ (R-R)2

Standard Deviation = Variance

Correlation-Coefficient (PAB) = COV AB / (Std. A) (Std. B)

● Investing management By Puthi Sing. Security analysis and portfolio management By

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