CHAPTER-V

DATA ANALYSES AND INTERPRETATION

1
Calculation of return of AVILA LIFE INSURENCE

Year Beginning Ending Dividend(Rs)

price(Rs) price(Rs)

2013-2014 1752.00 748.8 29.00

2014-2015 755.00 463.35 5.00
2015-2016 462.00 605.9 5.00
2016-2017 603.00 525.65 8.00
2017-2018 521.54 635.68 8.50

Return=Dividend+(Ending Price-Beginning price)

Beginning Price

Return(2013) = 29.00+(748.8-1752.00)* 100 = -55.60%

1752.00

Return(2014) = 5.00+(463.35-755.00) * 100 = -37.96%

755.00

Return(2015) = 5.00+(605.9-462.00) * 100 = 32.23%

462.00

Return(2016) = 8.00+(525.65-603.00) * 100 = -13.5%

603.00

Return(2017) = 8.50+(635.68-521.54) * 100 = 23.51%

521.54

2
CALCULATION OF RETURN OF AVILA LIFE INSURENCE
Year Beginning Ending Dividend(Rs)
price(Rs) price(Rs)

2013-2014 898.00 1571.05 10.00

2014-2015 1534.00 317.8 3.00
2015-2016 320.00 448 3.50
2016-2017 447.95 251.35 2.00
2017-2018 251.5 214.65 2.00

Return=Dividend+(Ending Price-Beginning price)

Beginning Price

Return(2013)=10.00+(1575.05-898.00) * 100 = 54.23%

898.00

Return(2014) = 3.00+(317.8-1534.00)* 100 = -75.95%

1534

Return(2015) = 3.50+(448-320.00) * 100 = 41.09%

320

Return(2016) = 2.00+(251.35-447.95) * 100 = -43.44%

447.95

Return(2017) = 2.00+(214.65-251.5) * 100 = -16.65%

251.5

3
CALCULATION OF RETURN OF AVILA LIFE INSURENCE
Year Beginning Ending Dividend(Rs)
price(Rs) price(Rs)

2013-2014 598.45 1095.25 17.00

2014-2015 1309.00 1451.17 17.00
2015-2016 1468 362.75 16.50
2016-2017 363 391.8 8.50
2017-2018 391 425.5 8.50

Return=Dividend+(Ending Price-Beginning price)

Beginning Price

Return(2013) = 17.00+(1095.25-598.45) * 100 = 85.52%

598..45

Return(2014) = 17.00+(1451.17-1309.00)* 100 = 16.35%

1309

Return(2015) = 16.50+(362.75-1468.00) * 100 = -70.24%

1468.00

Return(2016) = 8.50+(391.8-363) * 100 = 10.27%

363

Return(2017) = 8.50+(425.5-391.00) * 100 = 10.99%

391.00

4
Calculation of return of AVILA LIFE INSURENCE
Year Beginning Ending Dividend(Rs)
price(Rs) price(Rs)

2013-2014 502 1356.3 16.00

2014-2015 1345.05 1351.2 25.00
2015-2016 1369.00 2001.1 25.00
2016-2017 2018.00 2619.17 40.00
2017-2018 2648.65 2627.9 40.00

Return = Dividend+(Ending Price-Beginning p

Beginning Price

Return(2013)=16.00+(1356.3 -502)* 100 = 149.16%

502

Return(2014)=25.00+(151.2-1345.05)* 100 = 2.77%

1345.05

Return(2015)= 25.00+(2001.1-1369.00) * 100 = _76.34%

1369.00

Return(2016)=40.00+(2619.17-2018.00) * 100 = 31.9%

2018.00
Return(2017)=40.00+(2627.9-2648.65) * 100 = 0.726%
2648.65

5
Calculation of standard deviation of AVILA LIFE INSURENCE
_ _ _
Year Return (R) R R-R ( R-R )2
2013-2014 -55.6 -9.482 -46.14 2146.86992
2014-2015 -37.96 -9.482 -28.48 810.996484
2015-2016 32.23 -9.482 41.714 1739.89094
2016-2017 -13.5 -9.482 -2.018 4.072324
2017-2018 25.42 -9.482 34.902 1418.1696
-47.41 5899.97928

_
Average (R) = R = -47.41 = -9.48
N 5
_
Variance = 1/n-1 (R-R)2

Standard Deviation = Variance

= 1 (5899.97)
4
= 70.24

6
Calculation of standard deviation of AVILA LIFE INSURENCE
_ _ _
Year Return R R-R ( R-R )2
(R)
2013-2014 54.23 -7.744 61.974 3840
2014-2015 -75.95 -7.744 -68.206 4652
2015-2016 41.09 -7.744 48.834 2384
2016-2017 -43.44 -7.744 -35.696 1474
2017-2018 -16.65 -7.744 -6.906 47.692
-38.72 14197.692
_
Average (R) = R = -38.72 = -7.744
N 5
_
Variance = 1/n-1 (R-R)2

Standard Deviation = Variance _

= 1 (14197.692)
4
=55.22

7
Calculation of standard deviation of AVILA LIFE INSURENCE
_ _ _
Year Return (R) R R-R ( R-R )2
2013-2014 85.52 10.18 75.34 5676
2014-2015 16.35 10.18 4.17 17.39
2015-2016 -70.24 10.18 -80.42 6467
2016-2017 10.27 10.18 0.09 0.0081
2017-2018 10.99 10.18 0.81 0.6561
50.89 14181

_
Average (R) = R = 50.89 = 10.18
N 5

Variance = 1 (R-R) 2
n-1

Standard Deviation = Variance

= 1 (14181)
4
= 55.15

8
Calculation of standard deviation of AVILA LIFE INSURENCE
_ _ _
Year Return R R-R ( R-R )2
(R)
2013-2014 149.16 48.175 80.965 6555.3
2014-2015 2.77 48.175 -45.405 2061.6
2015-2016 76.34 48.175 28.185 793.3
2016-2017 31.9 48.175 -18.275 264.9
2017-2018 0.726 48.175 -47.449 2251.4
240.876 13926.5
__
Average R = R
N

= 240.876 = 48.175
5
__
Variance = 1 (R-R) 2
N-1

Standard Deviation = Variance

= 1 (13926.5)
4

= 54.6

9
Correlation between AVILA LIFE INSURENCE
DEVIATION 0F DEVIATION OF COMBINED
Year AVILA LIFE RB-RB DEVIATION
INSURENCE
___
RA-RA
2013-2014 61.974 75.34 4669.14
2014-2015 -68.206 4.17 -284.42
2015-2016 48.834 -80.42 -3927.23
2016-2017 -35.696 0.09 -3.215
2017-2018 -6.906 0.81 -5.59
448.667
n
Co-variance(COVAB )=1/n (RA-RA) (RB-RB)
t=1
Co-variance(COVAB )=1/5 448.667
= 89.7334
Correlation – Coefficient (PAB) = COV AB
(Std. A) (Std. B)
(55.22)(55.15)

=0.0295

10
Correlation between AVILA LIFE INSURENCE&AVILA LIFE
INSURENCE

DEVIATION OF DEVIATION OF COMBINED

AVILA LIFE __ DEVIATION
Year
INSURENCE RB-RB ___ ___
___ (RA-RA ) (RB-RB)
RA-RA
2013-2014 75.34 21.136 1790.73
2014-2015 4.17 -42.67 -177.93
2015-2016 -80.42 -25.03 2014.91
2016-2017 0.09 45.18 4.0644
2017-2018 0.81 1.43 1.178
3430.93
n
Co-variance(COVAB )=1/n (RA-RA) (RB-RB)
t=1

Co-variance(COVAB )=1/5 (3430.93)

=686.19

Correlation – Coefficient (PAB) = COV AB

(Std. A) (Std. B)
= 686.19
(55.15)(35.143)

= 0.354

11
 Correlation between AVILA LIFE
INSURENCE&BAJAJ
DEVIATION OF DEVIATION COMBINED
AVILA LIFE DEVIATION
Year
INSURENCE ___ ___
___ (RA-RA ) (RB-RB)
RA-RA
2013-2014 61.974 80.965 5017.72
2014-2015 -68.206 -45.405 3096.90
2015-2016 48.834 28.185 1575.41
2016-2017 -35.696 -18.275 580.95
2017-2018 -6.906 -47.449 327.68
10398.70
n
Co-variance(COVAB )=1/n (RA-RA) (RB-RB)
t=1
Co-variance(COVAB )=1/5 (10398.70)
=2079.74

Correlation – Coefficient (PAB) = COV AB

(Std. A) (Std. B)

= 2079.74
(55.22)(54.60)

= 0.690

12
STANDARD DEVIATION
COMPANY STANDARED DEVIATION
BAJAJ 54.60
AVILA LIFE 55.15
INSURENCE
AVILA LIFE 70.24
INSURENCE
AVILA LIFE 55.22
INSURENCE

AVERAGE

COMPANY AVERAGE
BAJAJ 48.175
AVILA LIFE INSURENCE 10.18
AVILA LIFE INSURENCE -9.45
AVILA LIFE INSURENCE -7.744

CORRELATION COEFFICIENT
COMPANY R
BAJAJAUTO&AVILA LIFE 0.605
INSURENCE
AVILA LIFE 0.0295
INSURENCE&AVILA LIFE
INSURENCE
AVILA LIFE 0.354
INSURENCE&AVILA LIFE
INSURENCE
AVILA LIFE 0.690
INSURENCE&BAJAJ

13
PORTFOLIO WEIGHTS
Formula:

Xa = (Std.b) 2– pab (std.a )(std.b)

(std.a) 2 + (std.b) 2 -2 pab (std.a) (std.b)
Xb = 1–Xa
Where X a = AVILA LIFE INSURENCE
Xa = (34.846)2– (0.586) (35.143 )(34.846)
(35.143) 2 + (34.846) 2
- 2 (0.586) (35.143) (34.846)
Xb = 1 –Xa

Xa = 0.4905
Xb = 0.5095

PORTFOLIO WEIGHTS
AVILA LIFE INSURENCE&AVILA LIFE INSURENCE:
Formula:

Xa = (Std.b) 2– pab (std.a )(std.b)

(std.a) 2 + (std.b) 2 -2 pab (std.a) (std.b)
Xb = 1–Xa
Where X a = AVILA LIFE INSURENCE
Xb = RANBAX
Std.a = 55.22
Std.b = 55.15

pab = 0.0295

Xa = (55.15)2 – 0.0295 (55.22) (55.15)

(55.22) 2 + (55.15) 2
- 2 (0.0295) (55.22) (55.15)
Xb = 1 –Xa
14
 Xa = 0.49918

X b = 0.50084

PORTFOLIO WEIGHTS

AVILA LIFE INSURENCE&AVILA LIFE INSURENCE:

Formula:

Xa = (Std.b) 2– pab (std.a )(std.b)

(std.a) 2 + (std.b) 2 -2 pab (std.a) (std.b)
Xb = 1–Xa
Where X a = AVILA LIFE INSURENCE
Xb = AVILA LIFE INSURENCE
Std.a = 54.60
Std.b = 104.186

pab = 0.605

Xa = (104.19)2 – o.605 (54.60) (104.19)

(54.60) 2 + (104.19) 2
- 2 (0.605) (54.60) (104.19)
Xb = 1 –Xa

Xa = 1.6206
X b = -0.6206

15
 Two Portfolios Correlat COMPAN COMPAN PORTFOL POR
ion Y Xa Y Xb IO TFO
Coeffici RETURN LO
ent Rp RISK
σp
ICICI&HDFC 0.5206 0.8199 ..0.1801 136.24 31.16
ITC&COLGATE 0.5008 0.0563 0.9497 26.835 22.77
AVILA LIFE 0.605 0.49918 0.50084 1.2335 49.43
INSURENCE&RA
NBAXI
M&M &BAJAJ 0.0295 1.6206 -0.620 142.61 171.2
2
__ __
PORTFOLIO RETURN ( Rp)=(Ra)(Xa) + (Rb) (Xb)
PORTFOLIO RISK= ___________________________________

σp=√ X1^2σ1^2+X2^2σ2^2+2(X1)(X2)(X14)σ1σ2

Portfolio return Rp
ICICI&HDFC 136.24
ITC&COLGATE 26.835
AVILA LIFE 1.234
INSURENCE&RANBAXI
M&M &BAJAJ 142.61

Portfolio risk
AVILA LIFE 31.16
INSURENCE&AVILA
LIFE INSURENCE
AVILA LIFE 22.77
INSURENCE&AVILA

16
LIFE INSURENCE
AVILA LIFE 49.43
INSURENCE&RANBA
XI
AVILA LIFE 171.22
INSURENCE &BAJAJ

17
 CHAPTER-VI

 FINDINGS
 SUGGESSIONS
 CONCLUSIONS
 BIBLIOGRAPHY

18
 FINDINGS
AVILA LIFE INSURENCE

The combination of AVILA LIFE INSURENCE and gives the proportion of investment
is 0.0478 and 0.4025 for and, based on the standard deviations The standard deviation
for is 70.47 and for AVILA LIFE INSURENCE is 22.2.

Hence the investor should invest their funds more in AVILA LIFE
INSURENCEwhen compared to AVILA LIFE INSURENCE as the risk involved in
AVILA LIFE INSURENCEis less than AVILA LIFE INSURENCE as the standard
deviation of AVILA LIFE INSURENCEis less than that of AVILA LIFE INSURENCE.

AVILA LIFE INSURENCE&AVILA LIFE INSURENCE

The combination of AVILA LIFE INSURANCE gives the proportion of investment is

0.49918 and 0.50084 for AVILA LIFE INSURENCE and, based on the standard
deviations The standard deviation for is 55.22 and for AVILA LIFE INSURENCE is
55.15. When compared to both the risk is almost same, hence the risk is same when
invested in either of the security.
AVILA LIFE INSURENCE & AVILA LIFE INSURENCE

The combination of AVILA LIFE INSURENCE and AVILA LIFE INSURENCE gives
the proportion of investment is 1.6206 and 0.6206 for AVILA LIFE INSURENCE and
AVILA LIFE INSURENCE, based on the standard deviations The standard deviation for
AVILA LIFE INSURENCE is 104. 186 and for AVILA LIFE INSURENCE is 54.6.
Hence the investor should invest their funds more in AVILA LIFE INSURENCE
when compared to AVILA LIFE INSURENCE as the risk involved in AVILA LIFE
INSURENCE is less than AVILA LIFE INSURENCE as the standard deviation of
AVILA LIFE INSURENCE is less than that of AVILA LIFE INSURENCE.

19
 CONCLUSIONS
In case of perfectly correlated securities or stocks, the risk can be reduced to a minimum
point.
In case of negatively correlative securities the risk can be reduced to a
zero.(which is company’s risk) but the market risk prevails the same for the security or
stock in the portfolio.

The importance of risk management in projects can hardly be overstated. Awareness of

risk has increased as we currently live in a less stable economic and political
environment.

Making a sound business case for having a strong risk management program has long
been an elusive challenge for many organizations. The question still remains
unanswered, “How much value should be placed on preventing loss from a disaster that
might never happen?” However it is generally agreed that the consequences of risk
management failure can be dire. There is a clear imperative for many companies to
develop a strong, consistent, enterprise wide risk management programme, as most
prevalent business risks will either remain at current levels or increase.

In pursuing this goal, companies, now more than ever, would do well to begin by
identifying their top drivers, then pinpointing the top threats to those revenue drivers,
and distinguishing between those that are predominantly downside risks and those that
are predominantly variable risks.

While both categories of risk deserve attention, companies may discover the
effectiveness of their risk management programs are most effective if they devote more
of their attention to controlling risk rather than transferring it to insurance companies.
And the risks that can be most directly controlled are downside risks, the very risks that
are most likely to threaten company’s top revenue drivers. When downside risks are
dealt with first through prevention and control, it enables senior management to deal
more aggressively with variable risks. In short they become more proactive and strategic
with their risk management approach.

20
Because companies indicate that they expect having trouble finding the time, budget and
people necessary to implement or maintain a strong risk management program, senior
management must demonstrate leadership in championing and funding this initiative.
The number one consequence of poor risk management is loss of competitiveness.

By implementing an effective risk management program, companies protect their ability

to compete. Nothing is more fundamental to business success.

21
 SUGGESTIONS:

1. Investor would be able to achieve when the returns of shares and debentures
2. Resultant portfolio would be known as diversified portfolio. Thus portfolio
construction would address itself to three major via. Selectivity, timing and
diversification
3. In case of portfolio management, negatively correlated assets are most profitable.
4. Correlation between the AVILA LIFE INSURANCE are negatively correlated
which means both the combinations of portfolios are at good position to gain in
future.
5. Investors may invest their money for long run, as both the combinations are most
suitable portfolios. A rational investor would constantly examine his chosen
portfolio both for average return and risk

22
 BIBLIOGRAPHY

BOOKS
1. DONALDE, FISHER & RONALD J.JODON
SECURITIES ANALYSIS AND PORTFOLIO MANAGEMENT,6TH EDITION
2. V.K.BHALLA
INVESTMENTS MANAGEMENT S. CHAND PUBLICATION.
3. V.A.AVADHANI.
INVESTMENT MANAGEMENT

Website
4. WWW. Investopedia.com

5. www.nseindia.com
6. www.bseindia.com.
7. www.icici.com
Newspapers& magazine
ECONOMIC TIME, FINANCIAL EXPRES.ETC

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