13-09-2014, 10:17 AM
Oil & Gas Sector
Oil & Gas Sector.pptx (Size: 431.55 KB / Downloads: 10)
Introduction to Risk and Return
* Risk and return are the two most important attributes of an investment.* Research has shown that the two are linked in the capital markets and that generally, higher returns can only be achieved by taking on greater risk.* Risk isn’t just the potential loss of return, it is the potential loss of the entire investment itself (loss of both principal and interest).* Consequently, taking on additional risk in search of higher returns is a decision that should not be taking lightly
RETURN
It represents the reward for undertaking investment.
Return is the primary motivating force that drives investment.
Since the game of investing is about returns, measurement of realized return is necessary to assess how well the investment manager has done.
In addition historical return is often used as an important input on estimating future return
TYPES OF STOCK
BLUE CHIP STOCKS: Stock of large well-established financial sound company that has operated for many year. A blue chip stock typically has a market capitalization in the billions is generally the market leader or among the top three companies in its sector and is more often than not a house hold name. while dividend payment are not absolutely necessary for a stock to be considered a blue chip. most blue chip have a record of payment stable or rising dividend for a year
Limitations of Study
The area of study is limited to few sectors of group a stock.(Pharma, Oil & Gas Sector)
The study is limited to data of the last three months only.
Risk can not be measured accurately as the market condition is always Fluctuating and uncertain.
The study is mainly based on secondary data and no field work is done because of time constraint.
To analyze the risk and return only Standard Deviation and Beta is used and no other statistical tools are used.
FINDINGS
When comparing the beta value of pharma companies the average beta less than one that means the risk associated with those stocks are low and the price of the shares are low fluctuating.
The growth in pharma stock mainly because of the growing strength of the Indian pharmaceutical companies.
Dr.Reddy’s lab stock shows negative beta in the month of April That means the systematic risk associated with this stock in that particular months is negative.
SUGGESTIONS
Based on the finding derived at, risk less investment can be made in the pharma stocks. they are volatile but still the risk associated with that stocks are less. In the pharma sector you also invest in Dr.reddy’s lab and Lupin Pharma in that shares return is must.
When an investor opts to enter the stock market he should first gather sufficient information about the type of investment options available to him. The investor should be in a position to decide where and how much of funds he is ready to invest in particular security.