RESEARCH

DESIGN
GOKUL RAM R

A STUDY ON ANALYSIS OF RISK & RETURN OF

PORTFOLIO INVESTMENT WITH REFERENCE TO
SELECTED SECTORS IN NSE.

INTRODUCTION
Risk and return will be very central terms in our analysis and it
is essential that the reader clearly understands the meaning of
each term and how assets with different payout structures can
be compared. General utility theory suggests that the average
investor is risk averse. Given the same expected return of two
assets with different risks, he would prefer the one with less
risk. (This assumption may not be perfectly true for all
individuals in all situations, but for the investor community as
a whole it is probably true). For an asset with uncertain cash
flows and payoffs, which are normally distributed, the mean of
the distribution will be the expected return while the standard
deviation forms some kind of risk. Choosing the less risky
asset therefore comes down to choosing the asset with the
lowest standard deviation in its payout distribution. An investor
could also approach the problem from the other direction,
choosing among assets with the same risk and then choose the
asset with the highest expected return.

STATEMENT OF THE
PROBLEM
The problem is to analyze the future risk and
return of holding various combinations of assets.

SCOPE OF THE STUDY

This study covers the Markowitz model. Here in, the
study covers the calculation of correlations between
the different securities in order to find out at what
percentage of funds should be invested among the
companies in the portfolio. Also the study includes
the calculation of individual standard deviations of
securities, and ends at the calculations of weights
of individual securities involved in the portfolio.
These percentages help in allocating the funds
available for investment based on risky portfolio.

OBJECTIVES OF THE
STUDY
The objective of the study has the following aspects:
1. To find out the optimal portfolio, which gave optimal
return at a minimize risk to the investor.
2. To see whether the portfolio risk is less than individual
risk on whos basis the portfolios are constituted.
3. To see whether the selected portfolios is yielding a
satisfactory and constant return to the investor.
4. To study which industries/sectors combination is
yielding a good return.

RESEARCH
METHODOLOGY
The research design used to carry out this study is
descriptive research because it deals with
statistical data and the main aim of the report is
to describe the factors affecting the problem
mentioned.
The present study is an analytical study.
For this study, secondary data is collected. The
secondary data is collected from brokerage firm.

Research Methodology

Type of research:
Population:
Sample Size:
Data Type:

Descriptive study
Investors
50
Secondary data

SOURCE OF DATA
The data collected is mainly secondary in nature.
The sources of data for this thesis include the
literature published by the NSE, various
magazines dealing with the current scenario and
research papers.
For the analysis of Risk And Return of portfolio
investment.

Tools Used for Analysis

A. statistical tools used are Mean, Correlation
Coefficient,
Co-variance, Std Dev.
B. Financial tools used are
1. Expected Return Exercise.
2. Expected Return Quiz.
3. Two Asset Portfolio Calculator.
4. Two Asset Portfolio Exercise.
5. Two Asset Portfolio Quiz.
6. Markowitz model.

THANK YOU