A Study On Risk and Return Analysis and Data

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A Study on Risk and Return Analysis and Data

Envelopment Analysis of Public and Private Sector Banks

Ms. Kavya Venkatesh


Fourth Sem MBA Student, BNM Institute of Technology, India, Email: [email protected]
Dr. Bhavya Vikas
Associate Professor, BNM Institute of Technology, India, Email: [email protected]
Ms. Charithra C M
Assistant Professor, BNM Institute of Technology, India, Email: [email protected]

Abstract : Risk and returns are like two faces of the same coin, if an investor wants to gain higher
returns, he must also accept the fact that this would also increase the amount of risk involved. Most
of the times, individual decision making process is influenced by risk and return analysis. The study
is focused on analyzing the performance of those nationalized banks listed in the NSE with respect to
return, risk and beta for the period 1st January 2017 to 31st December 2017. The term risk is a
situation in which the possibility of the consequence can be predicted, but uncertainty is the situation
where the possibility cannot be predicted. Risk and uncertainty are part and parcel of investment.
The possibility of risk is a loss for the investors. The methodology adopted includes analysis of the
performance of banking sector considering Bank Nifty Index as benchmark. Risk and return of bank-
ing stocks as well as Data Envelopment analysis method is used for analyzing the efficiency of banks.
The entire study is based on secondary data collected from the NSE. The data collected was based on
the monthly prices of the bank stocks listed in Bank Nifty. The reason for selecting monthly prices is
to measure the short term variations in the banking stocks due to various other internal and external
factors. The findings of the study revealed that if the investors are ready to take high risk for more
returns, the investors are suggested to invest in stocks like Bank of India and Punjab National Bank
in which risk and return are high. The investors who prefer low risk and return are suggested to
invest in Axis Bank stock.
Keywords: Risk, Return, Beta, Data Envelopment Analysis
Introduction investors for the future period of time. It may or
Banks plays a vital part in building the financial may not occur. Investors those who are willing to
matters of an economy and also individual. In purchase security based on expected return is most
India managing a banking division frames the life adequate but sometimes the return expected may
saver of financial movement for both rural and not be the same. The source of risk may be
urban areas. So the Adjustments in stock value dividends and the securities prices that happened
unpredictability of banks will impact the person to be expected. The term Risk is a situation in
and also the country. which the possibility of the consequence can be
Every investment is subjected to risk to some predicted, but Uncertainty is the situation where
extent or the other. The best investment is that the possibility cannot be predicted. Further the
increases the return by taking minimum risk into risk is divided in to Unsystematic and Systematic
consideration. For the purpose of minimizing the Risk. Unsystematic risk is the risk which is due to
risk the market information is necessary. Expected the internal factors of the organization within.
return is the amount of return predicted by the These factors are controllable from point of view

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 10
of organization. It should be planned in such a than the normal level. Author concluded that the
way that should be flexible and necessary action investor cannot be induced by such values. An in
can be taken by the organization to control the - depth study about the firm in terms of the capital
risk and its effects. The systematic risk are those structure, pattern of share holdings, financial
risk which are external to the firm and cannot be market knowledge are required for decision
controlled, which effects the entire market. This making for right investment.
type of risk arises out of Industry, market and state Karthika & Karthikeyan (2011) - The author
of economy. The external factors are normally analysis the risk and return of 10 companies (TCS,
uncontrollable from organization point of view. Maruti, Sun Pharma, SBI, ONFC, ACC, Bharati
It is macro in nature and it cannot be planned by Airtel Limited, Tata power, L&T and ITC) among
the organization. Sensex 30 companies for a period starting from
Data Envelopment Analysis is one of the Jan 2008 till May 2011. The author finds that the
nonparametric technique which is applied in value of beta of pharmaceutical, automobiles and
research operations and economics for the housing related sector are less risky whereas
valuation of frontiers in production. It is one of banking, oil and gas, and construction sector are
the means to measure the efficiency in the high risky, which tells that these are most
production unit for decision making. This tool is aggressive stocks.. The sector which moves the
used has benchmarking the service in production performance of the entire economy and there
and manufacturing operations. products are priced highly like Banking and power
The primary objective of this study was to analyse have high risk. The sector which does not move
the bank nifty movements and development the performance of the entire economy like
towards the equity stocks listed by the public and Pharmaceutical, FMCG, and Housing related are
private banks. The Principle goal of this study was of low risk. If the investor is planning to buy and
to evaluate the Performance of banks stock, with sell for a short duration of time beta is one of the
prime concentration towards identifying the rate good instruments to measure risk.
of return and the risk involved in the existing
market and the various other Internal and external Nagarajan and Prabhakaran (2013) - The
factors. The Study was undertaken for a short author has conducted analysis on equities of HUL,
period to examine the Performance of the listed ITC, Nestle India limited, Dabur India Limited,
stocks with the period of 1 year from January 2017 and GCPL of selected FMCG for 12 months. They
to December 2017. have founded that the variance of HUL is 0.76
and ITC is 0.84, which is maximum compared to
Review of Literature other companies. This indication shows that these
Vikkraman & Varadharajan (2009) - The author two companies are highly volatile than any other
has analyzed the risk and returns involved in the companies which is considered for the study. The
stock market of Indian automobile industry from Nestle Company has a co-efficient variation of
2004 till 2007 data from NSE. On the basis on 0.26 which is less volatile. Author concluded that
risk - return trade - off, the five top companies in the Dabur India Ltd has the low standard deviation
automobile industry, Mahindra and Mahindra and variance of 0.72 and 0.63, which has greater
motors has a risk of 97.33% and return of 7.5% range of probable return due to the greater
which is best for investment, even though TATA standard deviation and much variation, which
motors and Ashok Leyland has highest risk in the shows that the prices of stocks are variable. The
period 2004 - 2007 of 119.9% and 200.17% these beta of all the FMCG companies included in the
companies should produce highest return, but study is less than one, all the companies have
shockingly these two companies yielded a moved in positive direction with relation to Nifty
negative return of -8.6% and -13.84%. In the case Market index. He concluded that the investor
of Hindustan motors the expected return is of before making investment in equity one should
128.29% at a higher risk of 2092% which is more measure the price movement of the stocks in the

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 11
security market which help them to take a fruitful highest fluctuation in price. This could be possible
decision. It was founded that the Dabur India Ltd because of merger of Kotak Mahindra bank and
has moderate risk which yields moderate returns ING Vyasa bank in April 2015 among other
than any other company in FMCG related reasons. Bank of Baroda has the least Standard
companies which is considered for this study. Deviation of 19.39 reflecting least fluctuation
Krishnaprabha and Vijayakumar (2015) - price. HDFC Bank among the 12 banks has the
The author believes that risk and return plays a highest correlation (0.79) with the NIFTY index,
very important role for an investor to make followed by ICICI bank (0.74), yes bank (0.72),
decision, each and every investor who is interested and IndusInd and Axis bank (0.71), SBI ((0.69),
in stock market wants to avoid risk and maximize Bank of India (0.67), Canara Bank(0.64), PNB
returns. High risk would yield more return and (0.61), BOB (0.53). Federal bank and Kotak bank
low risk yields low returns, based on this concept have the least correlations of 0.40 and 0.41
banking and automobile industries gives high risk respectively.
but yields low returns and in case of Information Dr. M. Ravichandran and T. Iswarya (2016) - In
technology (IT), fast moving consumer goods and this paper the author has analyzed the risk and
pharmaceutical sectors gives low risk and yields return of selected mutual fund schemes on the
more returns, he concludes that investors who basis of Sharpe, Treynor and Jensen's measure.
wishes to invest for long term tenure they are able The main objectives of the study was to analyse
to take advantage of the market due to less volatile. the five year annual growth return given in their
When there is not much fluctuations in the stock schemes. To help the investors to choose the top
price when compared to market, investors who mutual fund according to their risk among the
are looking for long term investment are able to selected schemes, to measure the risk return
predict the price movement when they may fall. relationship of selected sector fund schemes and
According to author IT, FMCG and also to classify the return and compare the schemes
Pharmaceutical sectors yields more returns then of growth return. For the purpose of analysis
the banking and automobile sector. secondary data was collected and descriptive
research design has been applied. The top five
Dr. Prema Chandran (2016) - In this Paper schemes considered for the study are UTI
the author has made an attempt to measure the transportation and logistics fund, SBI Pharma
volatility of the bank index stocks and compare it fund, Birla sun life MNC fund, Reliance Pharma
with that of the Nifty stocks volatility. The fund, ICICI prudential banking and financial
investors who are risk averse would not be happy service fund. The tools used are alpha, Beta,
to invest in a highly fluctuating stock, where as standard deviation, Sharpe ratio and R- squared.
those with a thirst for riskiness would happily From the analysis the Beta (risk) value analyzed
invest in a highly volatile market. In this study for UTI transportation and logistics (1.16), SBI
standard deviation and individual beta values have sun Pharma (0.88), Birla sun life fund (0.73),
been calculated to get an idea of volatility. The reliance Pharma fund (0.88), and ICICI prudential
data used for the study is secondary in nature banking and financial services fund (0.85).In the
where the daily closing of the NIFTY index and long run, the private sector companies have
daily closing prices of stock of the 12 banks that performed better than the public sector. From the
are listed in the bank index is considered. The treynor's results, it has found that 19 out of 29
daily closing prices have been collected from the schemes had performed with the benchmark.
NSE website for a period of one year from April Bilal Ahmad Pandow and Khurshid Ahmad
1st 2015 to 30th March 2016.Volatility is Butt (2017) - The author in the present study looks
explained using standard deviation and Beta. in to the risk and return analysis of the selected
From the analysis and interpretation among the mutual funds in India. The main objective of the
bank listed in the Bank index, Kotak bank had
study was to analyze the growth and development
the highest standard Deviation of 309.85 reflecting
of Indian mutual fund industry and to identify the

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 12
challenges confronting by the industry. To analyze can select Maruti Suzuki Ltd (5.31%), Bosch
risk and return of select mutual fund in India. The (3.48%). In case of IT they can select HCL
data was collected from the Association of Mutual Technologies (1.02) % respectively. We can
Funds of India, NSE for s&p CNX Nifty and RBI. conclude that the automobile sector has performed
For this study the author has used Sharpe Ratio better than the IT sector.
and Treynor ratio which measures the unit of Faris Nasif Al Shubiri and Syed Ahsan Jamil
reward received per unit risk. The mutual fund (2018) - The authors from Sultanate of Oman in
industry which consist of all the three sectors i.e. this article have examined the idiosyncratic risk
public sector, private sector and foreign fund of the six Banking sectors companies that is listed
houses. The analysis states that the fund houses in Muscat Security Market. The variables included
which were 31 in number have grown to 44 by in this study was dependent variables, Oil
one year. Indicators, Stock Market Indicators and Fiscal
Sunil M Rashinkar and Divya U (2017) - Indicators. The Idiosyncratic risk will help the
The author studies the Market Risk analysis of investors the importance and impacts for the
Five Nationalized Banks in terms of Beta Co- investment portfolio decisions. With respect to this
efficient for the period of one year. The analysis study they have employed six numerical financial
of the study shows that the beta of State Bank of equations and Ordinary least square regression
India, Industrial Development Bank of India and method is used. The data was collected from the
Syndicate Bank were negative which implies that annual reports off all the Banking Company and
these stocks moved against the market and less from central bank reports. The descriptive
affected by market risk. The Punjab National Bank statistics shows that all banking sectors listed in
and Bank of Baroda were more than one, which Muscat Stock Market from the period 2009-2015
indicates that these stocks were exposed to high the mean was 0.0122 is calculating by representing
market risk and any small changes in the market all the bank population using regression test
will directly impact on these stocks. between the market return and stock return. The
standard deviation is 0.00864 and from the
Dr. S Poornima and Swathiga P (2017) - analysis the idiosyncratic risk is low. It can be
The author with reference to this paper concluded that the banks and the financial markets
investigates the study on relationship between risk in sultanate of Oman are different from those of
and return of stocks from two different sectors on advanced market that effects the oil export
NSE by using Capital Asset Pricing Model. The revenues which leads to mispricing in the market.
paper has done by analyzing in the selected stocks
Research Gap
from automobile sector and IT sector. Five stocks
in individual sector has been considered for the From the above literature review it is quite evident
sample. The objective was to compare average that very few studies have been done on risk and
return with the standard expected return using return analysis and data envelopment analysis
CAPM, and to rank the companies on the basis of simultaneously. A triangulation approach of public
risk and return. The tools used for this study is and private sector banks, risk and return analysis
average return, standard Deviation and Capital along with data envelopment analysis has been
Asset Pricing Model. taken up.
From the analysis it shows that all the companies Objectives and Scope of the Study
has positive beta value, i.e. Bosch and Maruti • To analyze the risk and return of private and
Suzuki Ltd. Bosch has high volatile in the market public sector banks listed on Bank Nifty.
7.36% and Hero Motocorp Ltd has less volatile • To rank the stocks on the basis of risk and
in the market is 2.78%. Whereas Bosch and Tata returns.
Motors have 7.36 and 5.62 % of variation with • To measure the efficiency of the banks using
respect to expected return respectively. Investors Data Envelopment analysis.

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 13
• The study covers a period of 12 months, i.e. ability. It ranges from +1 and -1. The following
starting from January 1st 2017 to 31st formula is used for calculating correlation.
December 2017. N ∑ RxRy − ∑ Rx∑ Ry
• The study is based on 12 stocks (securities) r=
listed on Bank Nifty in NSE belonging to N ∑ (Rx )
2
N ∑ Ry 2 − (∑ Ry ) 2

Banking sector. The twelve bank that were


considered for this study was- Bank of Baroda, Standard Deviation: In order to measure risk
Bank of India, Canara Bank, Punjab National standard deviation is the most commonly used
Bank, State Bank of India, Axis Bank, Federal technique. Standard deviation is also used for
Bank, HDFC Bank, ICICI Bank, IndusInd measuring the volatility of the share. Standard
Bank, Kotak Mahindra Bank and Yes Bank. deviation is used for measuring unsystematic risk
which cannot be controlled. Standard deviation
Sources of Data
is used for measuring the expected risk and also
The data are collected for 12 months (i.e. One for determining the importance of the certain
Year) prices of the stocks related to banking sector movement of price. The following formula is used
listed in Bank Nifty. The study is based on for calculating standard deviation.
secondary data collected from NSE website. The
additional data were also collected from websites,
journals, books and reports by researchers and S .D =
∑ ( x − x) 2

scholars. N
Tools:
Duration of the study
Rate of Return: The rate of returns is calculated
by using closing price and opening price of each The study covers for a period of 1 year (i.e.12
stock for individual return and market opening Months) of data is used i.e. from January 1st 2017
to December 31st 2017.
and closing price for market return. The following
formula can be used for calculating rate of returns. Limitations of the study
• The study is limited to data that is collected
R = Closing Price-Opening Price from a period of one year i.e. from January
X 100
Opening Price 2017 to December 2017.
Beta: It is the slope of characteristic regression • The study is limited to data collected from 12
line it describes the relationship between the index banks listed under Bank Nifty.
return and stock return. Beta helps in determining Analysis:
the sensitivity of the share price in relation to the Standard Deviation: In order to measure risk
index price. Beta measures the systematic risk standard deviation is the most commonly used
which cannot be diversified.Beta can be calculated technique. Standard deviation is also used for
with the help of the following formula. measuring the volatility of the share. Standard
deviation is used for measuring unsystematic risk
N ∑ RxRy − ∑ RxRy which cannot be controlled. Standard deviation
β=
N ∑ Rx 2 − (∑ Rx )
2 is used for measuring the expected risk and also
for determining the importance of the certain
Co-efficient of correlation: It is a statistical tool movement of price. The following formula is used
which helps in determining, the fluctuation in two for calculating standard deviation.
variables i.e. security return and market return. It Interpretation:
determines the extent of relationship but it does Figure-1 shows that the Bank of India gave the
not always imply cause and effect relation. This highest return of 61.04% for the year 2017
helps to understand the market indicator prediction whereas the Bank of Baroda has the lowest return

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 14
Table 1 - Table showing the list of banks and returns of Stocks listed on Bank Nifty
BANKS SECTORS RETURNS RANK
Bank of India PUBLIC 61.04 1
Federal Bank PRIVATE 49.42 2
Punjab National Bank PUBLIC 48.18 3
HDFC Bank PRIVATE 43.59 4
IndusInd Bank PRIVATE 38.90 5
Canara Bank PUBLIC 37.90 6
Kotak Mahindra Bank PRIVATE 34.47 7
Yes Bank PRIVATE 33.52 8
ICICI Bank PRIVATE 29.37 9
State Bank of India PUBLIC 21.63 10
Axis Bank PRIVATE 20.08 11
Bank of Baroda PUBLIC 3.87 12
Fig. 1 - Graph showing returns of the public and private banks according to their ranks (On the basis
of the returns)

of 3.87% the same year. All the banks listed in National Bank (PNB) is highest i.e. 2.75% (1%
the Bank Nifty yield the positive return for the change in Bank Nifty market returns causes 2.75%
year 2017. change in PNB Scrip returns). The value of beta
Interpretation: The value of beta of Punjab
Table 2 - Table showing Beta of Stocks Listed on Bank Nifty
BANKS SECTORS BETA
Bank of India PUBLIC 2.2548
Federal Bank PRIVATE 1.3817
Punjab National Bank PUBLIC 2.7514
HDFC Bank PRIVATE 0.7257
IndusInd Bank PRIVATE 0.9605
Canara Bank PUBLIC 2.0122
Kotak Mahindra Bank PRIVATE 0.9274
Yes Bank PRIVATE 1.7290
ICICI Bank PRIVATE 0.9318
State Bank of India PUBLIC 1.6104
Axis Bank PRIVATE 0.2972
Bank of Baroda PUBLIC 1.5246

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 15
Fig. 2 - Graph Showing Beta of Banking stocks listed on Bank Nifty

of Axis Bank is lowest i.e. 0.29% ( 1% change in Interpretation: The data in Table-3 state that
the Bank Nifty returns causes 0.29% change in Punjab National Bank (PNB) and Bank of India
Bank of India scrip returns) (BOB) have the highest sta ndard deviation of

Table 3 -Standard Deviation, Covariance and Correlation of Stocks listed on Bank Nifty
BANKS SECTORS STANDARD CO- CO-
DEVIATION VARIANCE RRELATION
Bank of India PUBLIC 18.0201 28.0268 0.4411
Federal Bank PRIVATE 7.8584 17.1743 0.6198
Punjab National Bank PUBLIC 18.1854 43.1994 0.5334
HDFC Bank PRIVATE 3.0573 9.0214 0.8639
IndusInd Bank PRIVATE 4.6612 11.9397 0.7265
Canara Bank PUBLIC 12.0966 25.0109 0.5864
Kotak Mahindra Bank PRIVATE 4.002 11.5282 0.8172
Yes Bank PRIVATE 10.0650 21.4909 0.5975
ICICI Bank PRIVATE 5.9344 11.5822 0.5535
State Bank of India PUBLIC 8.7965 20.0176 0.6454
Axis Bank PRIVATE 2.52 3.6942 0.3345
Bank of Baroda PUBLIC 9.7317 18.9503 0.5523

18.18% and 10.02% respectively, which states that direction. The value of correlation of Axis Bank
the risk is more, and Axis Bank has the lowest stock with the Bank Nifty index is lowest i.e.
standard deviation of 2.52%, which states that the 0.33%.
risk is less. The value of correlation of the HDFC Interpretation: The data in Table-3 state that
Bank is highest, which results that the scrip return Punjab National Bank (PNB) and Bank of India
and the Bank Nifty are closely correlated i.e. r = (BOB) have the highest standard deviation of
0.83% which moves each other in a positive 18.18% and 10.02% respectively, which states that

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 16
the risk is more, and Axis Bank has the lowest direction. The value of correlation of Axis Bank
standard deviation of 2.52%, which states that the stock with the Bank Nifty index is lowest i.e.
risk is less. The value of correlation of the HDFC 0.33%.
Bank is highest, which results that the scrip return Interpretation: The performance ratio of "Total
and the Bank Nifty are closely correlated i.e. r = Deposits Processed per number of employee"
0.83% which moves each other in a positive suggests that IndusInd Bank is the most efficient

BANKS INPUT (Number OUTPUT(Total OUTPUT/INPUT RANK


of Employees) Deposits) (Deposits)
Bank of Baroda 52420 601675.17 11.47 3
State Bank of India 209567 2044751.39 9.75 5
ICICI 83058 490039.06 5.89 11
Punjab National Bank 70801 621704.02 8.78 6
Bank of India 45613 540032.01 11.83 2
Axis Bank 56086 414378.79 7.38 10
HDFC 84325 643639.66 7.63 9
IndusInd Bank 10100 126572.22 12.53 1
Kotak Mahindra Bank 46500 157425.86 3.38 12
Federal Bank 9300 97644.56 10.50 4
Canara Bank 59413 495275.24 8.3 7
Yes Bank 18531 142873.86 7.7 8

bank at the Number of Total Deposits. This is of 2.52%, which states that the risk is less.
because it has the highest number of total deposits • The study shows the value of Beta of 12
i.e. 1253 deposits for each member of staff stocks in Bank Nifty, all the 12 stocks has a
employed. In contrast, the least efficient bank is positive value. And there is no company stock
Kotak Mahindra Bank since it has only 338 which has a negative value
deposits per staff employed. • Beta value of 5 stocks i.e. (Axis Bank,
HDFC, Canara Bank, ICICI Bank, IndusInd
Findings:
Bank, Kotak Mahindra Bank) out of 12
• During the period of study, Bank of India stocks listed in Bank Nifty is in the range of
(BOI) has the highest return of 61.04% and 0.2 to 1.0%. This indications shows that the
Bank of Baroda (BOB) has the lowest return stock price of the company increases or
of 3.87%. decreases depending on the movement in the
• On the basis of Average Returns, Bank of Bank Nifty Index. If the index increases by
India (BOI) has the highest return of 5.08% 10% scrip returns also increases on an
and Bank of Baroda (BOB) has the lowest average by 1 to 10% and vice versa.
return of 0.322%. • Beta value of 7 stocks i.e. (Bank of India,
• During this period of the study, Punjab State Bank of India, Bank of Baroda, Punjab
National Bank (PNB) and Bank of India National Bank, Federal Bank, Canara Bank,
(BOB) has the highest standard deviation of and Yes bank) out of 12 stocks listed in Bank
18.18% and 10.02% respectively, which Nifty is in the range of 1.0% to 3%. This
states that the risk is more. indications shows that the stock price of the
• Axis Bank has the lowest standard deviation company increases or decreases depending

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 17
on the movement in the Bank Nifty Index. If Reference
the index increases by 10% scrip returns also
Pandow, Bilal. (2017). Risk and Return Analysis
increases on an average of 10 to 30% and
of Mutual Fund Industry in India. International
vice versa.
Research Dynamics of Economics. 1. 8-19.
• In this study there are no negative correlation
10.20448/journal.524.2017.11.8.19.
found among the stocks listed in Bank Nifty
with the Bank Nifty Market Index. Chandra, D. P. (2016). "A study on te volatility
• IndusInd Bank is the most efficient bank and returns of the indian (p, 2017) banking sector
when compared to other banks which has index with reference to nse nifty" . International
highest number of total deposits for each Journal of Advance Research in Computer
member of staff employed. Science and Management Studies, 7.
• Kotak Mahindra Bank is the least efficient
Faris Nasif Al Shubiri, S. A. (2018). the impact
bank when compared to other banks which
of idiosyncratic risk of banking sector on oil, stock
has less number of total deposits for each
market, and fiscal indiacators of sultanaate of
member of staff employed.
oman. 8.
Conclusion:
Ishwarya, D. M. (2016). "A study on performance
The entire study is based on the analysis of the
of risk and return on selected mutual funds. "ijirst
stocks listed in Bank Nifty. This provides an idea
-International Journal for Innovative Research
for the investors to decide whether the investor is
in science & technology , 3.
required to purchase stocks on the basis of their
expected returns and risk. A positive correlation Karthikeyan, P. K. (2011). "A study on
indicates scrip stock is moving in the same comparative analysis of risk and return with
direction as the benchmark index and vice versa. reference to selected stocks of bse sensex index,
A stock with more beta value is not suggested has india". Research Journal of Social Science and
it is subjected to high market risk in which it Management , 14.
cannot be diversified like systematic and
P, S. P. (2017). "A study on relationship between
unsystematic risk. Hence it is better to avoid such
risk and return analysis of selected stocks on nse
stocks. The study will not suggest the investors
using capital asset pricing model". International
which is best stocks to invest and the worst stock
Journal of Applied Research 2017 , 4.
not to invest, because the stocks rating are done
on the basis of investment and type of investors. Prabhakaran, S. N. (2013). "A study on equity
If the investors are ready to take high risk for more analysis of selected fmcg companies listed on
returns the investors are suggested to invest in nse", Internation Journal of Management
stocks like Bank of India and Punjab National Focus,7.
Bank in which risk and return is high. The
U, S. M. (2014). " A study on market risk analyses
investors who prefer low risk and return are
of selected banking stocks (nationalized banks)
suggested to invest in Axis Bank stock.
in indian context". Acme Intellects International
Finally, from the study it is seen that many a time
Journal of Research in Management, 7.
market has collapsed which was not happened
earlier, which creates a fear in the investors to enter Varadharajan, D. P. (2009). "A study on risk & return
in to the market. By this analysis the investors analysis of automobile industry in india". Journal
will get an idea that the scrip returns will definitely of Contemporary Research in Management, 6.
get recovered if the market bounce back. Vijaykumar, D. S. (2015). A study on risk and
return analysis of selected stocks in india.
International Journal of Scientific Research and
Management , 5.

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018 18
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