Risk and Return Relationship: A Study of BSE Sensex Stocks in Indian Stock Market

Home > 2024, Vol. 15, No. 1 > Risk and Return Relationship: A Study of BSE Sensex Stocks in Indian Stock Market

Published: April 10, 2024

Download PDF

| Download HTML

Authors

Nitika Sharma, Kshitij Bhargava, and Dixit Sunail

DOI Number
https://doi.org/10.15415/jtmge/2024.151005

Keywords
Bombay stock exchange, Sensex, Risk, Return, Stock market

Abstract

Background: The present study is based on risk and return analysis of BSE Sensex stocks, which is the index of the Bombay Stock Exchange, and is based on the secondary data from the past 5 years. The Sensex index is the Bombay Stock Exchange of India’s benchmark that is broadly based on the stock market index of the Indian equity market.

Purpose: The main objective of the study was to investigate the risk and return of the stocks listed in Sensex and create a portfolio that reduces the unsystematic risk through diversification.

Methods: The study used secondary data from the past 5 years to analyze the risk and return of Sensex stocks and to construct a portfolio with reduced unsystematic risk.

Results: In this study it was found that the risk factor in the Sensex index was quite low and returns were quite moderate. Whereas the risk factor in the portfolio was quite low as well, the return-yielding capacity of the portfolio was high. It depends upon the investor’s risk appetite whether to invest in the Sensex index or the created portfolio.

Conclusion: The study concludes that while the Sensex index offers low risk and moderate returns, a well-diversified portfolio can yield higher returns with similarly low risk. The choice between investing in the Sensex index or the portfolio depends on the investor’s risk tolerance and return preferences.

References

Arora, N., & Singh, B. (2020). The long-run performance of SME IPOs in India: empirical evidence from Indian stock market. Journal of Asia Business Studies, 15(1), 88-109. https://doi.org/10.1108/jabs-10-2019-0305/
Bhat, M. S., & Shetty, M. S. R. (2019). A study on risk and return analysis of equity shares with special reference to stocks of bse sensex index. IJRAR-International Journal of Research and Analytical Reviews (IJRAR), 6(2), 581-587. http://ijrar.org/viewfull.php?&p_id=IJRAR19K5830
Biswas, J. (2007). Financial liberalisation and stock market behaviour: experiences of India and select Asian countries (Doctoral dissertation, University of North Bengal). https://ir.nbu.ac.in/server/api/core/bitstreams/e222ad6f-018e-4164-9b04-fefccfea826b/content
Bora, B., & Adhikary, A. (2015). Risk and Return Relationship-An Empirical Study of BSE Sensex Companies in India. Universal Journal of Accounting and Finance, 3(2), 45-51. https://doi.org/10.13189/ujaf.2015.030203
BSE Market (2021). Bombay Stock Exchange. https://www.bseindia.com/sensex/code/16/
Deb, S. G., & Misra, S. (2011). Are Equity Betas Stable? Evidence from Indian Equity Market. The IUP Journal of Applied Finance, 17(4).
Karthika, D. P., & Karthikeyan, P. (2011). A Study on Comparative Analysis of Risk and Return with reference to Selected stocks of BSE Sensex index, India. The International Journal’s Research Journal of Social Science and Research, 1(04). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2942593
Moneyworks4Me. (2021). Top BSE 30 companies. Moneyworks4Me. https://www.moneyworks4me.com/best-index/bse-stocks/top-bse30-companies-list/
Naik, P. K., & Padhi, P. (2012). The impact of macroeconomic fundamentals on stock prices revisited: An evidence from Indian data. https://mpra.ub.uni-muenchen.de/38980/
Prabhu, R. N. (2018). Risk & return analysis of nifty stock in Indian capital market. Risk, 5(3). https://www.researchgate.net/profile/Ruchi-Prabhu/publication/335526293_Risk_return_analysis_of_nifty_stock_in_Indian_capital_market/links/5d6ab32192851c8538837a9e/Risk-return-analysis-of-nifty-stock-in-Indian-capital-market.pdf
Raghavan, K. R. (2004). The effects of stock repurchases on long-term operating performance in banking firms: An empirical study. Cleveland State University.https://www.proquest.com/dissertations-theses/effects-stock-repurchases-on-long-term-operating/docview/305104979/se-2
Sood, P., & Bhushan, P. (2022). Factors impacting banking frauds in India: a conceptual framework. International Journal of Business and Globalisation, 31(4), 500-519. https://doi.org/10.1504/IJBG.2022.127129
Sruthi, S., Fernandez, C. J., Vani, G., Rao, K. S., Abirami, M., & Reddy, K. S. (2022) Recent Advances in Commerce & Management, 4. https://doi.org/10.25215/9394727316
Subramanyam, P., & Kalyan, N. B. (2018). A study of risk and return analysis of selected securities in India. International journal of engineering technologies and management research, 5(4), 79-86. https://doi.org/10.29121/ijetmr.v5.i4.2018.211
TradingView. (2021). Sensex. TradingView. https://in.tradingview.com/symbols/BSE-SENSEX/components/
Zabiulla. (2010). Measuring Risk – Adjusted Mutual Fund Performance: A Study of Select Sector Funds In India. Prerana – Journal of Management Thought and Practice, 2(1), 21-34.

How to Cite

Nitika Sharma, Kshitij Bhargava, and Dixit Sunail. Risk and Return Relationship: A Study of BSE Sensex Stocks in Indian Stock Market. J.Technol. Manag. Grow. Econ.. 2024, 15, 41-61

Risk and Return Relationship: A Study of BSE Sensex Stocks in Indian Stock Market

Current Issue

Periodicity	Biannually
Issue-1	May
Issue-2	November
ISSN Print	0976-545X
ISSN Online	2456-3226
RNI No.	CHAENG/2013/50088

OA Policy

Publisher's policy of the journal at Sherpa UK for the submitted, accepted, and published articles. Click OAPolicy

Plan-S Compliance

To check compliance, one has to use the Journal Check Tool (JCT). This tool provided by cOAlition S (European funders) for the researchers (fundee) to check the compliance with the journal.

Recommend journal to your library

You can recommend the journal being a researcher or faculty member to your library. We will post a copy of the Journal to your library on your behalf at free of cost.
Click here: Recommend Journal

Preprint Arxiv Submission

The authors are encouraged to submit the author’s copy (preprint) to appropriate preprint archives e.g. https://arxiv.org and/or on https://indiarxiv.org or institutional repositories (e.g., D Space) before paper acceptance by the editor of Journal. After publications of the paper author(s) should mention the citation information, title and abstract along with DOI number of the publication carefully on the required page of the depository(ies).

Contact: Phone: +91-172-2741000, +91-172-4691800

Email : editor.tmg@chitkara.edu.in;

Abstract and Indexing

Information

This work is licensed under a Creative Commons Attribution 4.0 International License.

Articles in Journal of Technology Management for Growing Economies(J.Technol. Manag. Grow. Econ.) by Chitkara University Publications are Open Access articles that are published with licensed under a Creative Commons Attribution- CC-BY 4.0 International License. Based on a work at https://tmg.chitkara.edu.in/. This license permits one to use, remix, tweak and reproduction in any medium, even commercially provided one give credit for the original creation.

View Legal Code of the above-mentioned license, https://creativecommons.org/licenses/by/4.0/legalcode

View Licence Deed here https://creativecommons.org/licenses/by/4.0/