pf from india infoline

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EXECUTIVE SUMMARY

In the present competitive scenario every individual very much interest

to invest their savings on market instrument, which gives higher returns, with

minimum risk. The untrade participate adopted by share market agents and lack

of awareness about the market the individual investor are facing lot of problems

in the share market.

The present liberalized, privatized and globalizes, economic scenario.

Providing the opportunity's to establish M N C's in the economy by individual

investor must control investment. While controlling portfolio, it needs to under

take scientific investigation about the individual portfolio management to get

benefited to the stock market. In present study a detailed investigation is

undertaken to study about portfolio management of investors in general and

portfolio investment in WIPRO,INFOSYS,SATHYAM,AMBUJACEMENT,

BAJAJAUTO, HDFC,HERO HONDA MOTORS, and BPCL in particular.

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CHAPTER 1

INTRODUCTION

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INVESTMENT DECISIONS

DEFINITION OF INVESTMENT

According to F.AMLING, "investment may be defined as the purchase

by an individual or institutional investor or a financial or real asset that produce

a return proportional to the risk assumed over some future investment period."

According to D.E FISHER and R.J.JORDAN, "investment is a

commitment of funds made in the expectation of some positive rate of return. if

the investment is properly undertaken. The return will be commensurate with

the risk investor assume".

CONCEPT OF INVESTMENT

Investment will be generally be used in its financial sense and as such

investment is an allocation of monetary resources to assets that are expected to

yield some gain or positive return over a given period. Investment is a

commitment of person's funds to derive future income in the form of interest,

dividends, rent, premiums, pension benefits or the appreciation of the value of

his principle capital.

Any investors would like to know the media or range of investment so

that he can use his discretion and save in those investments, which will give

them both security and stable return. The ultimate objective of the investor is to

derive a variety of investments that met his preference for risk and expected

return. The investor will select the portfolio, which will maximize his utility.

Another important consideration is the temperament and psychology of the

investor. It is not only the consideration of a portfolio that will promise the

highest expected return, but it is the satisfaction of the need of the investor.

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INVESTMENT PROCESS

The investment process may be described in the following stages.

1. INVESTMENT POLICY

The first stage determines and involves personal financial affairs and

objectives before making investment. It can also be called the preparation of the

investment policy stage. The investor has to see that he should be able to create

an emergency fund, an element of liquidity and quick convertibility of securities

into cash. This stage may, therefore, be called the proper time for identifying

investment assets and considering the various features of investment

.

2. INVESTMENT ANALYSIS

After arranging a logical order of types of investment. Preferred, the next

step is to analyze the securities available for investment. The investor must

make a comparative analysis of type of industry; kind of securities etc, the

primary concerns at this stage would be to form beliefs regarding future

behavior of prices and stocks, the expected return and associated risks.

3. INVESTMENT VALUATION

Investment value, in general is taken to be the present worth to the

owners of future benefits from investments. The investor has to bear in mind the

value of these investments. An appropriate stet of weights have to be applied

with the use of forecasted benefits to estimate the value of investment assets

such as stocks, debentures and bonds and other assets. Comparison of the value

with the current market price of the asset allows a determination of the relative

attractiveness of the asset. Each asset be valued on its individual merit.

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Type D: investor both stock picking and market timing skills

This type of investor would use the techniques used by both the type B

and type C investor. These investors would have the most active and aggressive

portfolio management strategies. Using their skills in identifying undervalued

scrip, they should hold concentrated portfolios. Portfolios and let the beta

fluctuate quiet sharply around the long run target value. A pitfall to be very

strenuously avoided is that of assuming that one has a skill, which one in reality

does not have. For example, a investor who does not have very good abilities in

scrip selection may still think that he does not have such skills. He should then

end up with an ill-diversified portfolio, which earns mediocre returns he would

have been better off with a passive portfolio.

QUALITIES FOR SUCCESFUL INVESTING

Contrary thing

Patience

Composure and

Flexibility.

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INTRODUCTION

Portfolio management is all about strengths, weaknesses, opportunity,

threats in the choice of debt vs. equity, domestic vs. international vs. growth vs.

safety, and numerous other trades-offs encountered in the attempt to maximize

return at a given appetite for risk.

A portfolio is a collection of securities. Since it is rarely desirable to

invest the entire funds of an individual or an institution in a single security, it is

essential that every security be view in portfolio context. Thus, it seems logical

that the expected return on a portfolio should depend on the expected return of

each of the security contained in the portfolio.

Portfolio analysis considers the determination of future risk and return in

holding various blends of individual securities. Portfolio expected return is a

weighted average of the expected return of individual securities but portfolio

variance, in short contrast, can be something less than a weighted average of a

security variance. As a result, an investor can sometimes reduce portfolio risk

by adding security will greater individual risk than any other security in the

portfolio. This is because risk depends greatly on the covariance among returns

of individual securities. Portfolios, which are combination of securities may or

may not take only aggregate characteristics of their individual parts.

WHAT IS DOES PORTFOLIO MANAGEMENT INVOLVE

Portfolio management involves establishing an integrated process,

which links programmers and project management with effective portfoliomanagement practices that support the successful delivery of the organizations

strategic objectives. The portfolio management process involves the collection

of pertinent information about all the programmer and project in an

organization, and relating that information to the business requirement and

capabilities of the organization. The outputs of portfolio management will be

informed decisions about choice of program and project, assignment of

priorities, reserves allocation, interdependencies, staffing and skill requirements

and deployment, risks and benefits, gaps and overlaps in the portfolio.

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OBJECTIVES OF THE PORTFOLIO MANAGEMENT

The objectives of portfolio management can be classified into two categories as

follows.

1) Basic objectives

a) To maximize yield

b) To minimize the risk

2) Secondary objectives

a) Regular return

b) Stable Income

c) Appreciation of capital

d) More liquidity

e) Safety of investment

f) Tax benefits

NEED FOR PORTFOLIO MANAGEMENT

Portfolio management is process encompassing many activities of

investment in assets and securities. It is a dynamic and flexible concept andinvolves regular and systematic analysis, judgment and actions. The objectives

of this service help the investors with the expertise of professional in investment

portfolio management. It involves construction of portfolio based upon the

investor's objectives, constraints and preferences for a risk, returns, and tax

liability. The portfolio reviewed and adjusted from time to time in tune with

market conditions. The evolution of portfolio is to be done in terms of targets

set for risk and return. The changes in the portfolio are to be effected to meetthe changing conditions.

Portfolio construction refers to the surplus funds in hand among the

verity of financial assets open for investment. Portfolio theory concerns itself

with the principal governing such allocation. The modern view of investment is

oriented more towards the assembly of proper combinations of individual

securities to force investment portfolio. A combination of securities held

together will give a beneficial result if they are grouped in a manner to secure a

high return after taking into consideration the risk element.

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ELEMENTS OF PORTFOLIO MANAGEMENT

Portfolio management is ongoing process involving the following basic tasks.

1. Identification of investor's objectives, constrains and preferences.

2. Strategies are to be developed and implemented in turn with

investment policy formulated.

3. Review and monitoring of the performance of the portfolio.

4. Finally the evaluation of portfolio.

IMPORTANTS OF PORTFOLIO MANAGEMENTS

Most organization operates in complex environment with many

programmers and project going on any one time. Portfolio management

provides the means to:

Establish a structure for selecting the right program and project

Assess weather requirements can be accommoMonthd with in existing

organization capability and capacity.

Allocate the right resources to the right program and project

Resolve conflicts and contentions for scarce and costly resources.

Identify and manage interdependencies between program and project

Assess the true implication of the aggregate level of program and project

risks.

PORTFOLIO ANALYSIS

A portfolio is a group of securities held together as investment. Investors

invest their funds in a portfolio of securities rather than in a single security

because they are risk averse. By constructing a portfolio, investors attempts to

spread risk by not putting all their eggs into one basket. Portfolio phase of

portfolio management consists of identifying the range of possible portfolios

that can be constituted from a given set of securities and calculating their return

& risk for further analysis.

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PORTFOLIO SELECTION

Portfolio analysis provides the input for next phase in portfolio

management, which is portfolio selection. The proper goal of portfolio analysis

can be to get high return at a given level of risks. The inputs from portfolio

analysis can be used to identify the set of efficient portfolios. From this set of

portfolio, optimal has to be selected for investment.

PORTFOLIO REVISION

Having constructed the optimal portfolio, the investor has to constantly

monitor the portfolio to ensure that it continues to be optimal. As the economy

and financial markets are dynamic, the changes take place almost daily. The

investor now has to revise his portfolio. The revision leads to purchase of new

securities and sale of some of the existing securities from the portfolio.

PORTFOLIO EVALUTION

The objective of construction a portfolio and revising it periodically is to

earn maximum return with minimum risk. Portfolio evolution is the process,

which is concerned with assessing the performance of a portfolio over selected

period in terms of return and risk. Portfolio evolution useful in yet another way.

It provided a mechanism of identifying weakness in the investment process and

for improving these deficient areas.

RISK

Risk refers to the possibility that the actual outcomes of an investment

will be differ from its expected outcome. More specifically, most investors are

concerned about the range of the possible outcome. Risk distinguished between

the expected return and the realize return from an investment. The expected

return is the uncertain future return that an investor expects to get from his

investment. The realized return is the certain return that an investor has actuallyobtained from his investments at the end of the holding period.

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RETURN ON PORTFOLIO

Each security in portfolio contributes returns in the proportion of its

investment. Thus the portfolio expected returns is the average of the expected

returns is weight representing the proportionate share of the security in the total

investment. Why an investor does have some many securities in his portfolio, if

the security ABC given the maximum returns, why not he the security all his

funds and thus maximum the return? The answers to this question lie in the

investor's perception of risk attached to investments his objectives of income,

safety, appreciation, liquidity andhedge against loss of value of money etc., this

pattern of investment in different asset categories, securities categories, types of

investment etc., would all be described under the caption of diversification

which aims at the reduction or even elimination of nonsystematic or company

related risk and achieve the specific objectives of investors.

PORTFOLIO RISK

Risk on a portfolio from risk on individual securities. The risk is

reflected in the variability of the return from zero to infinity. The expected

return depends on the probability of return and their weighted contribution of

the portfolio. There are two measures of risk in this context, one is the absolute

deviation and other is standard deviation. MARKOWITZ MODEL

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THE MEAN-VARIANCE CRITERION

Dr. Harry Markowitz is credited with developing the first modern

portfolio analysis model in order to arrange for the optimum allocation of assets

with in portfolio. To reach this objective Markowitz generated portfolios with in

a rewards risk context. In essence, Markowitz Model is theoretical frame work

for analysis of risk return choices. Decisions are based on the concept efficient

portfolio.

A portfolio is efficient when it is expected to yield the highest return for

the level of risk accepted or, alternatively, the smallest portfolio risk for a

specified level of expected return to build an efficient portfolio an expected

return level is chosen, and assets are substituted until the portfolio combination

with the smallest variance at the return level is founds. As this repeated for

other returns, set of efficient portfolio is generated.

ASSUMTIONS:-

The Markowitz Model is based on several assumptions regarding investor

behavior:

Investors consider each investment alternative as represented by a

probability distributed of expected returns over some holding period.

Investors maximize period-expected utility and posses utility curves,

which demonstrate diminishing marginal utility of wealth.

Individuals estimate risk on the basic of the variability of expected

returns.

Investor base decisions solely on expected return and variance returns

only.

For a given risk level, investors prefer high returns to lower returns.

Similarly for a given level of expected return. Investor prefers less risk

to more risk.

Under these assumptions, a single asset or portfolio assets is considered

to be "efficient" if no other asset or portfolio of assets offers higher

expected return with same risk or lower risk with the same expected

return.

Henry Markowitz has given the following formula for a two-security portfolio.

P=A

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COVABCorrelation Coefficient (Rab) = ------------------

(A)(B)

n

Co-variance (COVAB) =1/n (RA-RA) (RB-RB) T=1Where,

(RA-RA)(RB-RB)=combined deviations of A&B

(A)(B)=Standard deviation of A&B

COVAB = Covariance between A&B

N = no of observation

The next would be the construction of the optimal portfolio on the basis of whatpercentage of investment should be invested when two securities and stocks are

combined i.e., calculation of two assets portfolio weights by using minimum

variance equation, which is given bellow.

Where

WA =proportion of investment in A

WB = proportion of investment in BThe next and final step is to calculate the portfolio risk (combined risk)that

shows how much is the risk is reduced by combining two stocks or securities by

using this formula.

Formula:

p=A2+b2wb2+rabBwaWb

Where= Standard Deviation of Securities A

WA = portfolio of investment is securities A

= Standard Deviation of security B

WB= proportion of investment in security B

rab=Correlation coefficient between security A&B.

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CHAPTER-2

RESEARCH

METHODOLGY

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RESEARCH METHODOLOGY

The methodology adopted for this study deserves a special mention.

Firstly, the research studied various secondary sources of information. Then

after discussed with the companys managerial personnel, the mode and nature

of the data collected is explained in the following lines.

PRIMARY DATA

The lecturers given by the staff were used as the basis for the project.

The observation is various departments in the organization were the online

trading and various functions of the existing departments.

SECONDARY DATA

The information related to company and industry was obtained through

secondary sources such as company annual reports.

LIMITATIONS OF THE STUDY

The study has certain limitation/ constraints, which has led to the

obstruction of widening the scope and objective of the study.

Construction of the portfolio restricted to two-assets based in

Markowitz model.

The sample size is relatively small to conduct the study.

The present study reveals the movement share pricing and its

analysis for a limited period only.

Some assumptions have make to undertaken study whenever it is

difficult to get such information.

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OBJECTIVES OF THE STUDY

1. The main objective is analyzing the risk- return characteristics of

individual Securities in the portfolio.

2. To select of multiple securities for investing.

3. To suggest the best portfolio mix.

4. To compare the expected return with actual returns.

SCOPE OF THE STUDY

This study covers the Markowitz model. Here in, order to find out at

what percentage of funds should be invested among the companies in the

portfolio. In addition, the study includes the calculations of individual standard

deviations societies involved in the portfolio. These percentages help in

allocating the funds available for investment based on risky portfolios.

NEED OF THE STUDY

In the finance field, it is a common knowledge that money or finance is

scarce and the investors try to maximize their return. But, the return is higher, if

the risk is also higher. Return and risk go together and they have a tradeoff. The

art of investment is to see that the return is maximized with the minimum of

risk, which is inherent in invest

In the above discussion, we concentrated on the word "investment" and

for making invest we need to make securities analysis. Combination of

securities with different risk return characteristics will constitute the portfolio ofthe investor.

The portfolio is also built up out of the wealth or income of the investor

over a period, with a view to suit his risk or return preferences to that of the

portfolio analysis is thus an analysis of the risk characteristics of individual

securities in the portfolio and changes that may take. Place in the combination

with other securities due to interaction among themselves and impact of each ofthem on other.

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CHAPTER-3

COMPANY PROFILE

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COMPANY PROFILE

INDIA INFOLINE PROFILE

INDIA INFOLINE Ltd is listed on both the leading stock exchanges in

India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock

Exchange (NSE). The INDIA INFOLINE group, comprising the holding

company, INDIA INFOLINE Ltd and its subsidiaries, straddles the entire

financial services space with offerings ranging from Equity research, Equities

and derivatives trading, Commodities trading, Portfolio Management Services,

Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small

savings instruments to loan products and Investment banking. INDIA

INFOLINE also owns and manages the websites, www.indiainfoline.com and

www.5paisa.com .

INDIA INFOLINE Ltd, being a listed entity, is regulated by SEBI

(Securities and Exchange Board of India). It undertakes equities research which

is acknowledged by none other than Forbes as 'Best of the Web' and 'a must

read for investors in Asia'. Tata AIG's research is available not just over the

internet but also on international wire services like Bloomberg (Code: IILL),

Thomson First Call and Internet Securities where it is amongst the most read

Indian brokers. Its various subsidiaries are in different lines of business and

hence are governed by different regulators. The subsidiaries of INDIA

INFOLINE Ltd are:

INDIA INFOLINE Ltd

INDIA INFOLINE Ltd is a 100% subsidiary of INDIA INFOLINELtd,

which is engaged in the businesses of Equities broking and Portfolio

Management Services. It holds memberships of both the leading stock

exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National

Stock Exchange (NSE). It offers broking services. A SEBI authorized Portfolio

Manager; it offers Portfolio Management Services to clients. These services are

offered to clients as different schemes, which are based on differing investmentstrategies made to reflect the varied risk-return preferences of clients.

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INDIA INFOLINE Commodities Pvt Ltd

INDIA INFOLINECommodities Pvt Ltd is a 100% subsidiary of INDIA

INFOLINELtd, which is engaged in the business of commodities broking. Our

experience in securities broking empowered us with the requisite skills and

technologies to allow us offer commodities broking as a contra-cyclical

alternative to equities broking.

We enjoy memberships with the MCX and NCDEX, two leading Indian

commodities exchanges, and recently acquired membership of DGCX. We have

a multi-channel delivery model, making it among the select few to online as

well as offline trading facilities.

INDIA INFOLINE Distribution Co Ltd (IILD)

India Infoline.com Distribution Co Ltd is a 100% subsidiary of INDIA

INFOLINELtd and is engaged in the business of distribution of Mutual Funds,

IPOs, Fixed Deposits and other small savings products. It is one of the largest

'vendor-independent' distribution houses and has a wide pan-India footprint of

over 232 branches coupled with a huge number of 'feet-on-street', which help

source and service customers across the length and breadth of India. Its unique

value proposition of free doorstep expert advice coupled with free pick-up and

delivery of cheques has been met with an enthusiastic response from customers

and fund houses alike. Our business has expanded to include the online

distribution of mutual funds, wherein users can view and compare different

product offerings and download application forms which they can later submitto the product provider.

Mortgages & Loans

IILD has also entered the business to distribution of mortgages and loan

products during the year 2005-2006. The business is still in the investing phase

and we plan to roll the business out across its pan-Indian network to provide itwith a truly national scale in operations.

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INDIA INFOLINE Insurance Services Ltd

INDIA INFOLINE Insurance Services Ltd is also a 100% subsidiary of

INDIA INFOLINELtd and is a registered Corporate Agent with the Insurance

Regulatory and Development Authority (IRDA).

It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Ltd,

which is India's largest private Life Insurance Company.

INDIA INFOLINE Investment Services Ltd

India Info line Investment Service Ltd is also a 100% subsidiary of

INDIA INFOLINELtd. It has an NBFC licence from the Reserve Bank of India

(RBI) and offers margin-funding facility to the broking customers.

INDIA INFOLINE Insurance Brokers Ltd

India Info line Insurance Brokers Ltd is a 100% subsidiary of India Info

line Ltd and is a newly formed subsidiary which will carry out the business of

Insurance broking. We have applied to IRDA for the insurance broking licence

and the clearance for the same is awaited

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THE MANAGEMENT

Mr. Nirmal Jai

Nirmal Jain is the founder and Chairman of INDIA INFOLINELtd. He

holds an MBA degree from IIM Ahmedabad, and is a Chartered Account (All

India Rank 2) and a Cost Accountant. He has had an impeccable professional

and academic track record. He started his career in 1989 with Hindustan lever

Limited. During his stint with Hindustan Lever, he handled a variety of

responsibilities, including exports and trading in agro-commodities with Rs.3bn

annual turnover. He then joined hands with two local brokers to set up their

equity research division, inquire, in 1994. His work set new standards for

equity research in India. In 1995, he founded his own independent financial

research company, now known as INDIA INFOLINE ltd.

Mr. R. Venkataraman

R. Venkataraman is the co-promoter and Executive Director of INDIA

INFOLINELtd. He holds a B.Tech degree in Electronics and Electrical

Communications Engineering from IIT Kharagpur and an MBA degree from

IIM Banglore. He has held senior managerial positions in various divisions of

ICICI Limited, including ICICI Securities Limited, their investment banking

joint venture with J P Morgan of USA and with BZW and Taib Capital

Corporation Limited. He has also held the position of Assistant Vice President

with G e capital services India Limited in their private equity division. He has

varied experience of more than 14 years in the financial services sector.

THE BOARD OF DIRECTORS

Apart from Nirmal Jain and R Venkataraman, the Board of Directors on

INDIA INFOLINE comprises.

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Mr. Sat Pal Khattar (Non Executive Director)

Mr. Sat Pal Khattar joined the Board with effect from April 20, 2001.

Mr. Sat Pal Khattar is a lawyer by profession. He was the founding partner of a

firm of solicitors in Singapore named Khattarwong and at present is a

Consultant in the said firm. He is also a director of a number of public

companies in Singapore and India. He is the Chairman of Network India', a

body sponsored by the Government of Singapore, which promotes two-way

business contacts betIten Singapore and Indian business interests.

Mr. Sanjiv Ahuja (Independent Director)

Mr. Sanjiv Ahuja joined the Board with effect from august 28, 2002.

Mr. Ahuja graduated from National University of Singapore with a degree in

Computer Science and is also a Certified Public Accountant. He started his

career in 1988 with Accenture (formerly Andersen Consulting and has worked

on several large projects particularly in the electronics and utilities industries.

He joined the Thakral Group of Companies in 1991 as the Chief Executive of

their electronics packaging and Warehousing Company in Singapore and has

also headed the group's Indian investments division. He started his own

investment advisory and consulting company in 2001, named Centennial

Management Consultants Private Limited, focusing on investment mediation

and investment management and advice. At present, he is also an Executive

Director with Corporate Brokers International Private Limited, a reputed

Singapore based mergers and acquisitions firm focusing on the SME space and

a board member of the Singapore Indian Chamber of Commerce and Industry, apost he has held since 2002. He is very familiar with the South Asian and south

East Asian Markets and has direct investment experience in a variety of

industries including real estate development, distribution and information

technology. Mr. Ahuja has an experience of more than 17 years.

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Mr. Nilesh Vikamsey (Independent Director)

Mr. Nilesh Shivji Vikamsey joined the Board with effect from February

11, 2005. Mr. Vikamsey qualified as a Chartered Accountants of India since

1985. He has a Diploma in Information System Audit from the institute of

Chartered Accountants of India in 2003. In 1985, Mr. Vikamsey was inducted

as partner in M/S Khimji Kunverji & Co., Chartered Accountants and was in

charge of the audit department till 1990 and thereafter also handles assignments

related to financial services, consultancy, investigations, mergers and

acquisitions, valuations etc. Mr. Vikamsey is a director of alpha Garments

Private Limited, English apparels Private Limited. HLB Technologies

(Mumbai) private limited, Miloni Consultants private limited &Chairman of

HLB India. Mr. Vikamsey is a member of the Accounting Standards Board and

erstwhile Member of the Vision & Restructuring Committee of Institute of

Chartered Accountants of India and member of Expert Committees of law and

Company Affairs, infotainment & Media and Economic & Business Reforms

formed by the Indian Merchants Chamber.

Mr. Kranti Sinha (Independent Director)

Mr. Kranti Sinha joined the Board with effect from January 27-2005.

Mr. Sinha graduated from the Agra University with a Masters degree. He

started his career in 1965 as a direct recruit Class I officer with life insurance

Corporation of India and has worked in various capacities and at different

locations throughout the country. He worked at various managerial levels and

rose through the hierarchy to serve as the Director and Chief Executive of LIC

Housing Finance Limited from August 1998 to December 2002 and

concurrently as the managing Director of LICHFL Care Homes (a whollyowned subsidiary of LIC Housing Finance Limited). He has also served as the

Deputy President of the Governing Council of Insurance institute of India and

as a member of the Governing council of National Insurance of Academy, Pune

apart from various other such bodies. He is currently the Managing Director of

The Global Institute for Financial and Education Services India) private Limited

(a wholly owned subsidiary of The Global Institute, LLC, USA). Mr. Sinha is

also on the Board of Directors of Hindustan Motors Limited, Larsen & TourboLimited and LICHFL Care Homes Limited.

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CHAPTER-4

DATA ANALYSIS

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ANALYSIS OF THE PORTFOLIO

ANALYSIS OF PORTFOLIO AMBUJA CEMENTS & INFOSYS LTD.

Calculations of standard deviation of Ambuja cements ltd for the year2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr 8.136094 0.6746 7.4614 55.67248May 0.016152 0.6746 -0.613 0.37576Jun -0.178417 0.6746 -0.853 0.72762July 0.089395 0.6746 0.5853 0.342576Aug 0.145967 0.6746 -0.5287 0.279523Sept -0.114122 0.6746 -0.7887 0.62204

Oct -0.040637 0.6746 -0.7152 0.51151Nov -0.03252 0.6746 -0.7071 0.4999Dec -0.14308 0.6746 -0.8176 0.66846Jan 0.13018 0.6746 -0.5445 0.296480Feb -0.05673 0.6746 -0.7313 0.53479Mar 0.1441 0.6746 -0.5305 0.28143

Total 8.0962 (R-R)2 = 60.8126

R 8.0962Average = -------- = ------------- = 0.6746

N 12

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

T=1

= (1/12-1) (60.8126)

= 5.52842

_______Standard deviation = variance

________= 5.52842

= 2.35126

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Calculation of standard deviation of Infosys ltd for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.16080 0.5380 -0.4146 0.1718May 0.190846 0.5380 -0.063 0.0396

Jun 0.04784 0.5380 -0.206 0.0424Jul -0.01553 0.5380 -0.2693 0.0725Aug 0.0565 0.5380 -0.1973 0.0389Sept 0.046569 0.5380 -0.2073 0.0429Oct -3.2777 0.5380 -3.5319 12.4714Nov -0.039019 0.5380 -0.2928 0.0857Dec 0.111966 0.5380 -0.1418 0.0201Jan -0.0401 0.5380 -0.2939 0.0863Feb -0.02124 0.5380 -0.275 0.0754Mar 0.05516 0.5380 -0.1987 0.0394

Total 3.0457 (R-R)2 = 13.1509

R 3.0457Average = ----------- = ------------ = 0.25380

N 12

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

T=1

= (1/12-1) (13.1509)

= 1.19542

______Standard deviation = variance

______= 1.1954= 1.09334

N

COVAB = 1/n (RA-RA) (RB-RB)T=1

= 1/12(.0465)6.0913)= 0.02574

COVAB

Rab = ------------(A)(B)

0.02574= -----------------------

(2.3512)(1.0933)

= 0.01001

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WEIGHTS:B (B-rabA)

Wa = -------------------------------A2+B2-2rabABAB

Wb = 1-WA

1.09334(1.09334)-(0.01001) (2.35123)Wa = ---------------------------------------------------------------

(2.35123)2+ (1.09334)2-2(0.01001)(2.35123)(1.09334)

1.1718573Wa = -----------------

6.556985Wa = 0.17818

Wb = 1-wa

= 1-0.178718

Wb = 0.82128

Portfolio risk

AMBUJA & INFOSYS

_____________________p = A2+b2wb2+rabBwaWba = 2.35123b=1.09334rab = 0.01001

Wa = 0.17818

Wb = 0.82128

p = (2.35123)2(0.17818)2 + (1.09334)2+(082128)2

+2(0.01001)(2.35123)(1.09334)(0.17818)(0.82128)

_____________________________p = (0.176574) + (0.806292)+(7.55394)

________p = 8.536813)

p = 2.9217%

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AMBUJA CEMENTS & INFOSYS LTD

As for calculation and study, AMBUJACEMENTS bears a proportion of

0.178718 and INFOSYS Ltd bears a proportion of 0.82128. The risk Of

INFOSYS is less than that of AMBUJA cements i.e., 2.35123> 1.09334, which

risk of 2.9217% when compared to the individual risk of both the companies is

high.

AMBUJA CEMENTS & BAJAJ AUTO Ltd

Calculations of standard deviating of Ambuja cements ltd. for the year

2009-10R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr 8.136094 0.6746 7.4614 55.67248May 0.016152 0.6746 -0.613 0.37576June -0.178417 0.6746 -0.853 0.72762July 0.089395 0.6746 0.5853 0.342576Aug 0.145967 0.6746 -0.5287 0.279523Sept -0.114122 0.6746 -0.7887 0.62204Oct -0.040637 0.6746 -0.7152 0.51151Nov -0.03252 0.6746 -0.7071 0.4999Dec -0.14308 0.6746 -0.8176 0.66846Jan 0.13018 0.6746 -0.5445 0.296480Feb -0.05673 0.6746 -0.7313 0.53479Mar 0.1441 0.6746 -0.5305 0.28143

Total 8.0962 (R-R)2=60.8126

R 60.8116Average = ------------- = ---------------- = 0.6746

N 12

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

2

T=1= (1/12-1) (60.8116)

= 5.52832

_______Standard deviation = variance

_______= 5.52832

= 2.35123

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Calculation of Standard deviation of BAJAJ AUTO Ltd for the year2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.Dev

Apr 0.0073 0.7656 -0.0692 0.00478May 0.11581 0.7656 0.0393 0.00154June 0.111245 0.7656 0.0347 0.00120July 0.05350 0.7656 -0.023 0.000529Aug -0.01962 0.7656 -0.0961 0.00923Sept 0.18461 0.7656 0.1081 0.0116Oct -0.00280 0.7656 -0.0793 0.00629Nov 0.16562 0.7656 0.0891 0.00793Dec -0.00556 0.7656 -0.082 0.00672Jan 0.06908 0.7656 -0.0075 0.000056Feb 0.19330 0.7656 0.1168 0.0136

Mar 0.0464 0.7656 -0.0301 0.000906Total 0.918895 (R-R)2=0.064381

R 0.918895Average = ----------- = ------------ = 0.07656

N 12


T=1

= (1/12-1) (0.064381)= 0.00585


______= 0.00585

= 0.0765N

COVAB = 1/n (RA-RA) (RB-RB)

T=1=1/12(.0465) (7.4917)

=0.02901

COVABRab = ------------

(A)(B)

0.02901= ---------------------

(2.3512)(0.0765)= 0.16135

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WEIGHTS:

WA = weight of Ambuja cements

Wb = weight of Bajaj Auto ltd

B(B-rabA)Wa = -------------------------------

A2+B2-2rabABAB

(0.00585)( 0.00585) - (0.16135) (2.35123)Wa = ----------------------------------------------------------------------------------- (2.35123)2 + (0.00585)2-2(0.16135)(2.35123)(0.00585)

-0.3794Wa = -----------------

5.5239Wa = 0.0687

Wb = 1-wa

= 1-0.0687

Wb = 0.9313

Portfolio risk

AMBUJA & BAJAJ AUTO

_______________________p = A2+b2wb2+rabBwaWb

a = 2.35123b=0.00585 rab = 0.16135

Wa = 0.1396

Wb = 0.8604

p = (2.35123)2(0.1396)2+(0.00585)2+(0.9313)2

+2(0.16135) (2.35123) (0.00585) (0.0687) (0.9313)

_____________________p = (0.1072)+(7.2877)+(7.000)________

p = 14.3949

p = 3.7940%

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AMBUJA CEMENTS & BAJAJ AUTO

In the combination, the investors can invest their funds in accordance

with in this combination; the investment i.e., 0.1396 for Ambuja and the

remaining 0.8604 in Bajaj. The difference in weights exits because the risk of

Ambuja, which is 2.35123%, funds in this portfolio it is suggested that the

investor should invest portion of funds in Bajaj and divert the remaining funds

to Ambuja. In comparison the portfolio risk, which is 3.7904% is less the

individual risks of both the assets in the portfolio

INFOSYS LTD & ACC CEMENTS

Calculation of standard deviation of INFOSYS ltd for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.16080 0.25380 -0.4146 0.1718May 0.190846 0.25380 -0.063 0.0396June 0.04784 0.25380 -0.206 0.0424July -0.01553 0.25380 -0.2693 0.0725Aug 0.0565 0.25380 -0.1973 0.0389Sept 0.046569 0.25380 -0.2073 0.0429

Oct -3.2777 0.25380 -3.5319 12.4714Nov -0.039019 0.25380 -0.2928 0.0857Dec 0.111966 0.25380 -0.1418 0.0201Jan -0.0401 0.25380 -0.2939 0.0863Feb -0.02124 0.25380 -0.275 0.0754Mar 0.05516 0.25380 -0.1987 0.0394

3.0457 (R-R)2=13.1509

R 3.0457Average = ----------- = ------------ = 0.25380

N 12


T=1= 1/12-1) (13.1509)

= 1.19542


______= 1.1954= 1.09334

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Calculation of standard deviation of ACC for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr 06.206896 0.78075 -6.9875 48.8251

May 0.043490 0.78075 -0.7373 0.543611Jun -3.967729 0.78075 -4.7484 22.54730July 0.133905 0.78075 -0.6460 0.417316Aug 0.104965 0.78075 -0.6758 0.45670Sept 0.015104 0.78075 -0.7686 0.586143Oct -0.091836 0.78075 -0.8725 0.761256Nov 0.142760 0.78075 -0.638 0.407044Dec 0.04745 0.78075 -0.73325 0.53758Jan 0.065055 0.78075 -0.7157 0.512226Feb 0.093554 0.78075 -06872 0.47224Mar 0.25136 0.78075 -0.52934 0.08020

9.36905 (R-R)2=76.34659

R 9.36905Average = ----------- = ------------ = 0.78075

N 12

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

= 1/12-1)(76.34659)= 6.93989

______Standard deviation = variance______

= 6.9398

= 2.6343

COVAB = 1/n (RA-RA)(RB-RB)T=1

= 1/12(6.0913)(6.8900)

= 3.8149

COVABRab = ------------

(A)(B)3.8149

= -----------------------(1.09334)(2.6343)

= 1.3246

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WEIGHTS: WA = weight of Infosys Ltd.

Wb = weight of ACC ltd

B (B-rabA)

Wa = -------------------------------A2+B2-2rabABABWb = 1-WA

(2.6346)(2.6346)-(1.3246)(1.09334)Wa = ------------------------------------------------------------

(1.09334)2+(2.6343)2-2(3.9497)(2.3513)(3.1378)

5.4914Wa = -------------

0.4797Wa = 11.4475

Wb = 1-WA

1-11.4475

Wb = 10.4475

Portfolio riskInfosys & ACC ltd

_____________________p = A2+b2wb2+rabBwaWbA = 1.09334b=2.6343 rab = 1.3246

Wa = 11.4475Wb = 10.4475

p = (1.09334)2(11.4475)2+(2.6343)2+(10.4475)2

+2(1.3246)(1.09334)(2.6343)(11.4475)(10.4475)

________p = 2.6614p = 1.6313%

INFOSYS & ACC Ltd

The proportion of the investment in this combination is 11.4475 for

INFOSYS and 10.4475 for ACC Ltd. The investor can invest a larger share of

funds in INFOSYS and a lesser part in ACC. This is because the risk of

INFOSTS, which is 1.09334, is less than the risk of ACC, which is 1.6313%

and investors generally tend to invest in less risk securities. Also the portfolio

standard deviation, which is less than the individual risks of both companies.

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ZEE TELEFILMS & HDFC Bank Ltd

Calculation of standard deviation of ZEE Telefilms Ltd for the year2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.048188 0.15111 -0.19929 0.0397165May 0.068798 0.15111 -0.08232 6.776582Jun 0.1114285 0.15111 -0.03969 1.575296July 0.214836 0.15111 0.06372 4.060238Aug 1.052631 0.15111 0.90149 0.812684Sept -0.100026 0.15111 -0.25113 0.063066Oct -0.189376 0.15111 -0.34048 0.115926Nov 0.085583 0.15111 -0.06553 4.294180Dec 0.012911 0.15111 -0.13819 0.0190964Jan 0.041785 0.15111 -0.10933 0.011953

Feb 0.092207 0.15111 -0.05890 3.46563Mar 0.368043 0.15111 0.21693 0.047058

Total 1.81338 (R-R)2=21.2852345

R 1.813381Average = ----------- = ------------ = 0.15111

N 12

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

= 1/12-1) (21.2852345)= 1.934827


______= 1.93482

=1.39098

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Calculation of standard deviation of HDFC Ltd for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.0142214 0.02802 -0.04224 0.00178

May -0.179123 0.02802 -0.04593 0.00211Jun 0.1830223 0.02802 0.155 0.024025July 0.0968 0.02802 0.06878 0.00473Aug -0.052331 0.02802 -0.08035 0.006456Sept 0.069284 0.02802 0.0418 0.00175Oct -0.1191860 0.02802 -0.1472 0.021667Nov 0.0861769 0.02802 0.05815 0.003381Dec 0.025438 0.02802 -2.62 6.8644Jan 0.072654 0.02802 0.4463 0.199183Feb -0.041476 0.02802 -0.06949 0.004829Mar 0.0481029 0.02802 0.020082 0.000403

Total 0.3363 (R-R)2=7.134714

R 0.3363Average = ----------- = ------------ = 0.02802

N 12


T=1= (1/12-1)(7.134714)

= 0.6486


______= 0.6486

= 0.80536COVAB = 1/n(RA-RA)(RB-RB)

T=1= 1/12(0.10263)(2.61739)= 0.0244

COVABRab = ------------

(A)(B)

0.0244= -----------------------

(0.80536)(1.87122)

0.0244= -----------

1.50701= 0.01619

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WEIGHTS:

WA = weight of ZEE TelefilmsLtd.

Wb = weight of HDFC Bank Ltd

B(B-rabA)Wa = -------------------------------

A2+B2-2rabABABWb = 1-Wa

(1.87122)(1.87122)-(0.0937)(1.39398)Wa = ---------------------------------------------------------------

(1.39098)2+(1.87122)2-2(0.0937)(1.39098)(1.87122)Wa = 0.2199

Wb = 1-wa

1-0.2199

Wb = 0.7801

Portfolio risk

ZEE Telefilms & HDFC Bank Ltd

______________________p = A2+b2wb2+rabBwaWb

A = 1.39098b=1.87122 rab = 0.0937Wa = 0.2199

Wb = 0.7801

p = (1.39098)2(0.2199)2+(1.87122)2+(0.7801)2

+2(0.0937)(1.39098)(1.87122)(0.2199)(0.7801)

________p = 10.5907

p = 3.254%

ZEE& HDFC

THE SD of ZEE Telefilms is 0.2199% and the risk of HDFC is 0.7801%this means that risk of ZEE is less when compared to the risk of HDFC ittherefore suggests that investors can invest a greater percentage of their fundsin ZEE and the remaining funds in HDFC. The calculated weight also suggeststhe same. It shows that investors can invest up to 0.0937% in ZEE and a ratio ofin HDFC. If we combine both the securities the portfolio standard deviationstand at 3.2543%, which is the less than the individual risks of both the

companies.

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WIPRO Ltd & BPCL

Calculation of standard deviation of WIPRO Ltd for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.058718 0.4074 -0.4661 0.2172May 0.1238618 0.4074 -0.2836 0.0804Jun 0.070699 0.4074 -0.3368 0.1134July -0.0321052 0.4074 -0.4395 0.1931Aug -0.5038775 0.4074 -0.9112 0.8302Sept 4.864864 0.4074 4.4574 19.8684Oct -0.024866 0.4074 -0.4322 0.1867Nov 0.1539617 0.4074 -0.2535 0.0442Dec 0.0982222 0.4074 -0.3092 0.0956Jan 0.14025 0.4074 -0.2654 0.0704

Feb -0.018396 0.4074 -0.4257 0.1812Mar 0.074134 0.4074 -0.3333 0.11108Total 4.8897 (R-R)2=22.0118

R 4.8897Average = ----------- = ------------ = 0.4074

N 12


T=1= (1/12-1)(22.0118)

= 2.0008


_____= 2.0008

= 1.4144

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Calculation of standard deviation of BPCL Ltd for the year 2009-10

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr -0.0213453 0.8056 -0.8269 0.6837

May 0.108828 0.8056 -0.6968 0.4855Jun -0.0772613 0.8056 -0.8828 0.07793July -9.864864 0.8056 -9.0592 82.0691Aug .00220113 0.8056 -0.7833 0.6135Sept 0.1165745 0.8056 -0.6891 0.4748Oct -0.1034146 0.8056 -0.909 0.8262Nov 0.1333783 0.8056 -0.6223 0.3872Dec -0.020969 0.8056 -0.8265 0.6831Jan -0.0455069 0.8056 -0.8511 0.7243Feb 0.060975 0.8056 -0.7447 0.5545Mar -0.06171 0.8056 -0.8317 0.6917

Total 9.6674 (R-R)2=88.27153

R 9.6674Average = ----------- = ------------ = 0.8056

N 12


T=1= (1/12-1)(88.27153)= 8.02469

______

Standard deviation =variance______=8.02469

=2.83279

COVAB = 1/n(RA-RA)(RB-RB)T=1

=1/12(0.0090)(19.3346)=15.8176

COVABRab = ------------

(A)(B)15.8176

= -----------------------(1.4144)(2.83279)

15.8176

= ------------4..00670

= 3.94779

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WEIGHTS:WA=weight of WIPRO Ltd.

Wb=weight of BPCL Bank Ltd

B(B-rabA)

Wa = -------------------------------A2+B2-2rabABABWb = 1-Wa

(2.83279)( 2.83279)-(3.3870)-(1.4144)Wa = ---------------------------------------------------------------

(1.4144)2+(2.83279)2-2(3.3870)(1.4144)( 2.83279)Wa = -0.18832Wb = 1-waWb = 1-(-0.18832)

Wb = 1.18832

Portfolio risk

WIPRO & BPCL_____________________

p=A2+b2wb2+rabBwaWb

A = 1.4144b=2.83279rab = 3.3870

Wa = -0.18832

Wb = 1.18832

p = (1.4144)2(-0.18832)2+(2.83279)2+(1.18832)2

+2(3.3870)(1.4144)( 2.83279)( -0.18832)( 1.18832)

_____p = 3.4339165

p = 1.8531%

WIPRO & BPCLIn this combination of portfolio, the risk of BPCL is less when

compared to the risk of WIPRO i.e., -0.3296 < 1.3296. in addition, the

calculated proportion of investment is for BPCL. So it is suggest that investor

the large share of funds in BPCL, which is less risky, and the remaining funds

be diverted to WIPRO. The calculated portfolio risk, which is 2.3894%, is when

compared to the individual standard deviations of the companies in the

portfolio.

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HERO HONDA MOTORS & SATYAM Ltd

Calculation of standard deviation of HERO HONDA MOTORS Ltd for theyear 2009-10

R R R-R (R-R)2MONTH RETURNS AVERAGE DEVIATIONS Sq.DEVApr -0.91717 0.1230 -0.2147 0.460May 0.090729 0.1230 -0.0323 0.0104Jun 0.032678 0.1230 -0.0904 0.0817July 0.051113 0.1230 -0.0719 0.0516Aug 0.038291 0.1230 -0.0848 0.0719Sept 0.109118 0.1230 -0.0139 0.00193Oct -0.057533 0.1230 -0.1805 0.0325Nov 0.170474 0.1230 0.0474 0.0224Dec 0.035783 0.1230 -0.0873 0.0762

Jan -4.476744 0.1230 -4.5997 21.1572Feb 0.025144 0.1230 -0.0979 0.0958Mar 2.595936 0.1230 -2.4729 6.1152

Total 1.4771 (R-R)2=28.17683

R 1.4771Average = ----------- = ------------ = 0.12309

N 12


T=1= (1/12-1) (28.17683)= 2.5615


_____= 2.5615

= 1.6004

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Calculation of standard deviation of SATYAM Ltd for the year 2009-10

R R R-R (R-R)2

MONTH RETURNS AVERAGE DEVIATIONS Sq.DEVApr -0.027754 0.7298 -0.7575 0.5738

May 0.1281094 0.7298 -0.6017 0.3620Jun 0.115384 0.7298 -0.6145 0.3776July 0.026771 0.7298 -0.7031 0.4943Aug 0.019326 0.7298 -0.7105 0.5048Sept 0.049568 0.7298 -0.6803 0.4628Oct 0.078462 0.7298 -0.6514 0.4243

Nov 0.071065 0.7298 -0.6588 0.4340Dec 0.130641 0.7298 -0.5992 0.3590Jan 8.03941 0.7298 0.3031 53.335Feb 0.028676 0.7298 -0.7012 0.4916Mar 0.105009 0.7298 -0.6248 0.3903

Total 8.7577 (R-R)2= 58.2095

R 8.7577Average = ----------- = ----------- = 0.7298

N 12


T=1= 1/12-1)(58.2095)= 5.2912

______

Standard deviation =variance______=5.2912

=2.30026COVAB = 1/n(RA-RA)(RB-RB)

T=1=1/12(2.9531)(0.0010)

= 0.2459

COVAB

Rab = ------------(A)(B)

0.2459= -----------------------

(2.5275)(2.30026)

0.2459= ------------

5.81325= 0.0422

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BAJAJ AUTO LTD AND TISCO

Calculation of Standard deviation of BAJAJ AUTO Ltd

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr 0.0073 0.7656 -0.0692 0.00478May 0.11581 0.7656 0.0393 0.00154June 0.111245 0.7656 0.0347 0.00120July 0.05350 0.7656 -0.023 0.000529Aug -0.01962 0.7656 -0.0961 0.00923Sept 0.18461 0.7656 0.1081 0.0116Oct -0.00280 0.7656 -0.0793 0.00629Nov 0.16562 0.7656 0.0891 0.00793Dec -0.00556 0.7656 -0.082 0.00672

Jan 0.06908 0.7656 -0.0075 0.000056Feb 0.19330 0.7656 0.1168 0.0136Mar 0.0464 0.7656 -0.0301 0.000906

Total 0.918895 (R-R)2=0.064381

R 0.918895Average = ----------- = ------------ = 0.07656

N 12


T=1= (1/12-1) (0.064381)

= 0.00585


______= 0.00585

= 0.0765

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Calculation of Standard deviation of TISCO Ltd

R R R-R (R-R)2

Month Returns Average Deviations Sq.DevApr 09 -0.158310 0.02893 -0.18724 0.035058

May 09 0.055563 0.02893 0.02663 7.09156Jun 09 -0.06437 0.02893 -0.0933 8.70489July-09 0.082794 0.02893 0.05386 2.90089Aug-09 0.064441 0.02893 0.03551 1.26096

Sept 09 0.083120 0.02893 0.05419 2.93655Oct 09 -0.203359 0.02893 0.17442 0.30422Nov 09 0.019562 0.02893 -9.368 87.7594Dec 09 0.086571 0.02893 0.05764 3.32236Jan 10 0.058246 0.02893 0.029316 8.59076Feb 10 0.060837 0.02893 0.031907 1.01761

Mar 10 0.262117 0.02893 0.233187 0.054376 R= 0.347206 (R-R)2= 124.0200

R 00.34721Average = ----------- = ------------ = 0.02893

N 12


T=1= (1/12-1)(124.0200)= 11.273418


______= 11.273418

= 3.35759N

COVAB = 1/n(RA-RA)(RB-RB)T=1

= 1/12(7.4917)(8.9518)

= 5.5864

COVABRab = ------------

(A)(B)

5.5864= --------------------(0.0765)(3.3575)

= 21.754

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WEIGHTS:WA = weight of Bajaj Auto ltd

Wb = weight of TISCO ltd

B(B-rabA)

Wa = -------------------------------A2+B2-2rabABABWb = 1-Wa

(3.3575)(3.3575)-( 21.754)( 0.0765)Wa = ---------------------------------------------------------------

(0.0765)2+(3.3575)2-2(21.754)( 0.0765)(3.3575)

9.60914Wa = --------------

99.81802

Wa = 0.09626Wb = 1-wa

1-0.09626

Wb = 0.90374

Portfolio risk

Bajaj Auto & TISCO ltd_____________________

p = A2+b2wb2+rabBwaWb

a = 3.3178b=3.3575 rab = 0.5302Wa = 0.09626

Wb = 0.90374

p = (3.1378)2(0.09626)2+(3.3575)2+(0.90626)2

+2(0.5302)(3.1378)(3.3575)(0.09626)(0.90374)

________p = 104.29230

p = 10.2123%

Bajaj Auto & TISCO ltd

In this portfolio the risk of Bajaj is less when compared to the risk of

TISCO (0.0962 < 0.90374). the proportion of investment arrived at is 3.3575 for

Bajaj and 3.1378 for TISCO.The calculated portfolio risk is 10.2123%, which is

much lesser when compared to the individual standard deviation of both the

companies involved in the portfolio.

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REPRESENTS TO TABLE 1& 2 CHART

CALCULATIONS OF AVERAGES & STANDARD DIVIATIONS

COMPANY NAME AVERAGES STANDARD DIVIATIONSAMBUJA Cements 0.6746 2.3512INFOSYS 0.2538 1.0933BAJAJ AUTO 0.0765 3.1378ACC Cements 0.7807 2.6343ZEE Telefilms 0.1511 1.3909HDFC Bank 0.0280 1.8712BPCL Ltd 0.8056 3.3131HERO HONDA 0.1230 2.5275TISCO Ltd 0.0289 3.3575SATYAM Ltd 0.7298 2.3002WIPRO 0.4074 21.035

AVERAGES

STANDARD DEVIATION

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CALCULATED CORRELATION COEFFICIENT & PORTFOLIO RISK

Company name Correlation co-efficient

Portfolio risk(%)

Ambuja & Infosys -0.01001 2.9217

Ambuja & Bajaj Auto 3.9497 3.7940

Infosys & ACC Cements 1.3246 1.6313

ZEE Telefilms& HDFC 0.0937 3.2543

WIPRO & BPCL 3.3870 2.3894

Hero Honda & Satyam 0.4229 1.6652

Bajaj Auto & TISCO 0.5302 10.123

Infosys & Hero Honda -0.186 4.8850

Correlation Co-efficient

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Portfolio risk (%)

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CHAPTER-5

FINDINGSAND

SUGGESTIONS

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FINDINGS

The analytical part of the study for the 12-month period reveals the following:-

As far as the average returns of the selected companies are concerned,AMBUJA Cements in performing well in isolation whereas WIPRO's

average return in isolation for the period of the study is very poor.

As far as the standard deviations of the selected companies are

concerned, WIPRO's standard deviation is very high whereas its returns

as discussed above are very low. So it can be concluded possess the too

highest standard deviation and its return is high . this means that higher

the risk higher will be the return. Another risky security in the selectedscrip's is BPCL. Rests of the scrip's in the study are moderately risky.

As far as the correlation co-efficient are concerned the selected only

negatively correlated scrip's as suggested by Markowitz. Accordingly

the best correlation coefficient is between WIPRO and BPCL, but the

portfolio risk with this combination is very high when compared to other

portfolio combination. Another set of portfolio that is negatively

correlated is INFOSYS and ACC. This combination's portfolio risk isless when compared to the risks of other portfolios. So the investors who

are very much concern about the risk, can invest their funds in this

combination. Rest of the portfolio combinations fall under the moderate

risk category.

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SUGGESTIONS

It is observed during the course of the project work most of the investors

are not practicing the techniques and tools that are available to conductcompany analysis, industry analysis and economic analysis to select a

best portfolio for investment. This is one of the reasons of getting loss in

investment business. Hence it is necessary to utilize the available tools

and techniques to select a best portfolio.

The stockbrokers and legislative body of stock market are not practicing

the professional methods available to give suggestions to the investors.

Generally their suggestions are based on experience and expectation. In

this project work few techniques and methodologies explained for the

selection of a best portfolio. The broker may take good decisions. If he

practiced the above said techniques and methodologies.

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ANNEXURESStock Price:

Code: 500180 company Name: HDFC Bank Ltd for the period: Apr2009 to Mar 2010

Month Open(Rs)

High(Rs)

Low(Rs)

Close(Rs)

No. ofshares

No oftrades

Net T/O(Rs)

Apr 09 774.10 810.90 766.23 791.54 131820 19811 497,589,419

May 09 781.65 801.20 775.20 795.56 184721 24290 802,016,771

Jun 09 852.36 860.50 841.63 844045 681013 38994 113,199,410

July-09 931.50 935.12 915.61 926.28 58834 26670 104,487,070

Aug-09 995.80 1033.2 978.85 1024.7 60784 14858 916,509,051

Sept 09 1109.2 1109.1 1085.6 1087.5 31332 51489 1,691,865,795

Oct 09 1088.2 1098.4 1065.3 1069.4 37753 25494 908,214,966Nov 09 1059.3 1087.6 1045.5 1078.6 289463 33156 1,328,529,706

Dec 09 950.40 950.85 903.63 932.12 180547 30578 1,411,164,800

Jan 10 938.70 966.52 938.85 948.4 209114 35820 1,245,772,799

Feb 10 1001.3 1031.1 990.58 1026.5 53127 24927 834,243,437

Mar 10 1140.1 1140.2 1098.6 1104.6 105720 22405 132,514,966

Stock Price:

Code: 500104 company Name: BPCL for the period: Apr 2009 to Mar 2010

Month Open(Rs)

High(Rs)

Low(Rs)

Close(Rs)

No. ofshares

No oftrades

Net T/O(Rs)

Apr 09 341.20 344.00 329.30 334.50 87178 70387 3,561,059,532

May 09 315.12 316.80 305.45 311.41 67789 10812 3,990,343,910

Jun 09 358.45 375.45 354.10 373.46 310464 10487 2,589,810,283

July-09 372.52 372.20 364.58 366.75 35827 76314 1,842,671,749

Aug-09 395.12 405.80 392.75 400.05 106645 58570 1,388,874,437

Sept 09 361.78 361.25 351.20 354.60 124178 52138 1,440,772,287Oct 09 343.45 342.95 335.40 336.80 34201 45062 1,167,564,466

Nov 09 358.47 365.15 356.15 359.90 351899 67924 2,490,202,161

Dec 09 303.80 317.75 301.25 310.20 178031 51851 1,888,413,318

Jan 10 308.70 308.28 300.05 302.20 94221 41649 1,472,749,153

Feb 10 340.78 348.96 336.74 338.80 119628 42611 1,670,249,778

Mar 10 354.10 363.90 352.41 359.93 188071 43423 1,885,908,555

Stock Price:

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Code: 507685 company Name: WIPRO Ltd for the period: Apr 2009 toMar 2010

Month Open

(Rs)

High

(Rs)

Low

(Rs)

Close

(Rs)

No. of

shares

No of

trades

Net T/O(Rs)

Apr 09 1528.2 1545.6 1520.8 1538.3 363728 154225 5,126,679,386May 09 1650.8 1658.9 1610.2 1629.3 156872 165361 5,316,744,258Jun 09 1813.5 1813.0 1791.4 1798.2 107920 181457 5,171,470,031July-09 1856.4 1863.4 1845.2 1847.5 101852 174315 4,658,310,328Aug-09 2090.7 2115.6 2080.3 2097.2 168522 193847 6,040,409,835

Sept 09 2180.5 2193.4 2161.4 2108.6 134237 126851 4,220,099,492Oct 09 2252.9 2265.4 2228.1 2240.3 103096 120772 4,196,674,755

Nov 09 2250.4 2255.1 2225.6 2244.2 245066 63377 2,726,008,230

Dec 09 2166.3 2166.2 2053.1 2078.3 825338 74438 2,296,473,466Jan 10 2000.1 2026.1 1996.9 2012.9 215746 64055 2,286,685,248Feb 10 2010.6 2056.3 2010.3 2049.8 169419 73197 1,954,909,436Mar 10 1937.2 1939.4 1911.4 1920.4 201982 79678 2,233,377,951

Stock Price:

Code: 500376 company Name: SATYAM Comp for the period: Apr2009 to Mar 2010

Month Open(Rs)

High(Rs)

Low(Rs)

Close(Rs)

No. ofshares

No oftrades

Net T/O(Rs)

Apr 09 350.62 358.54 347.60 355.70 1798538 468538 22,641,751,272

May 09 370.52 374.58 362.20 368.40 1840696 444189 19,506,000,996

Jun 09 407.50 410.52 406.85 409.12 602546 574158 22,294,443,088

July-09 411.25 413.69 407.52 409.56 771306 368697 14,758,107,133

Aug-09 434.25 436.85 431.50 431.50 376655 260571 11,555,526,857

Sept 09 456.21 463.80 452.78 459.20 263017 282647 14,516,536,732

Oct 09 493.58 493.00 482.52 483.52 490520 306451 15,876,396,671Nov 09 468.95 475.10 463.25 472.37 890641 235520 1,288,610,570

Dec 09 439.78 449.80 404.85 412.39 1569163 251684 11,286,192,805

Jan 10 463.58 471.20 457.35 412.50 545082 253018 11,091,579,203

Feb 10 465.20 473.00 457.00 470.10 1406483 194653 9,135,523,533

Mar 10 466.39 475.75 466.00 467.25 413037 226924 14,021,476,950

Stock Price:

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Code: 500376 company Name: BAJAJ Auto for the period: Apr 2009 toMar 2010

Month Open(Rs)

High(Rs)

Low(Rs)

Close(Rs)

No. ofshares

No oftrades

Net T/O(Rs)

Apr 09 2713.3 2750.5 2675.3 2736.6 45295 20175 724,230,943

May 09 2495.5 2520.5 2451.1 2473.5 60849 21064 1,400,056,764

Jun 09 2729.8 2750.5 2673.3 2687.5 21960 18436 667,326,493

July-09 2934.7 3020.6 2920.1 2998.3 151141 23591 866,585,258

Aug-09 2775.4 2822.3 2751.4 2799.8 48143 39059 1,340,301,400

Sept 09 2680.6 2711.8 2633.4 2644.7 87750 37880 1,427,303,984

Oct 09 2630.3 2645.5 2602.3 2618.3 17381 22066 765,590,345

Nov 09 2756.5 2776.5 2747.2 2762.5 30919 13316 498,433,323

Dec 09 2650.2 2695.4 2550.5 2616.6 102823 19219 876,440,694Jan 10 2430.1 2445.2 2408.5 2425.3 191702 20461 1,145,389,307

Feb 10 2425.8 2475.8 2425.0 2445.8 27944 14008 1,412,808,389

Mar 10 2204.5 2258.9 2204.5 2224.5 200275 8425 911,636,689

CHAPTER-7

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BIBLOGRAPHY

Investment Management Security & Portfolio Management

-PREETI SINGHPortfolio Management-S. KEVIN3. Security Analysis & Portfolio Management

-DONALD E.FISHER-RONALD J. JORDANSecurity Analysis & Portfolio Management

- A.V. AVADHANI5. .Security Analysis & Portfolio Management

- PUNITHAVATHY PANDIAN

WEBSITES

www.indiainfoline.com

www.nseindia.com

www.satyam.com

www.infosys.com

www.wipro.com

www.ambujacement.com

www.bajajauto.com

www.hdfc.com

www.herohondamotors.com

www.bpcl.com

www.equitymasters.com
http://www.indiainfoline.com/http://www.nseindia.com/http://www.satyam.com/http://www.infosys.com/http://www.wipro.com/http://www.ambujacement.com/http://www.bajajauto.com/http://www.hdfc.com/http://www.herohondamotors.com/http://www.bpcl.com/http://www.equitymasters.com/http://www.indiainfoline.com/http://www.nseindia.com/http://www.satyam.com/http://www.infosys.com/http://www.wipro.com/http://www.ambujacement.com/http://www.bajajauto.com/http://www.hdfc.com/http://www.herohondamotors.com/http://www.bpcl.com/http://www.equitymasters.com/

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