Data Analysis and Investment

DATA ANALYSIS AND INVESTMENT
PURPOSE OF THE STUDY

The purpose of the study is to find out at what percentage of investment should be
invested between the two companies, on the basis of risk and return of each security in
comparison. These percentage help in allocation the funds available for investment based on
portfolios.
IMPLEMENTATION OF STUDY
For implementing the study, ten securities or stock constituting the sensex Market is
selected, comprising of one month opening share price from the Times of India, dated from 1 st
March to 31st March.
In order to know the risk of stock or securities, the formula to be used is given below
Average Returns =
Total Return
No. of Days
Standard Deviation () =
variance
Variance = 1/n-1 * (Xi-X)]

dx2 = Squares of deviation taken from actual mean.
After that it is required to compare the Stock or Securities of two companies with each other by
using the below formula or Correlation Co-efficient as follows.
Co-variance (COVab) =
(x-x) (y-y)
N-1
(dXdY) =Summation of product of deviation between two companies.

n= Number of observation or samples.
Correlation co-efficient (rab) =
COV (ab)
(a)(b)
COVab = Co-Variance between A & B

(a)(b) = product of standard deviation between A & B
This next step is the formation of the optimal portfolio on the basis of what percentage of
should be invested when two securities and stock is combined i.e., calculation of portfolio
weight by using minimum variance equation as follows.
Xa =
(b)2 rab (a)( b)

(b)2 + (a)2 2(rab)( a)( b)
Where,
Xa is the proportion of Security A
Xb is the proportion of Security B
a = standard deviation of Security A
b = standard deviation of Security B
rab= Correlation Co-efficient between A&B
The final step is to calculate the risk, that portfolio risk, combined shows how much the risk is
reduced by combining two securities or stock by using the given below formula,
p=
a2*Wa2+b2*Wb2+2rab*a*b*Wa*Wb
Where,
p = Portfolio risk.
Wa = Proportion of Investment in security 1.
Wb = Proportion of Investment in security 2
a = Standard deviation of security 1.
b = Standard deviation of security 2.
rab = Correlation co-efficient between Security 1&2.
APPENDIX
Share price exercised in the month of March 2008
DATE
BHEL
HDFC
BHARATI
ITC
ICICI
TELEVENTURES
01-03-08
2176.80
932.60
675.60
171.85
831.90
04-03-08
2172.20
981.10
667.15
172.50
855.35
05-03-08
2099.60
947.70
691.75
166.55
845.85
06-03-08
2010.05
935.00
684.45
162.50
820.70
07-03-08
2026.55
935.65
666.85
162.05
851.60
08-03-08
2015.15
915.65
666.95
158.25
826.60
11-03-08
2175.45
972.30
673.20
159.85
863.40
12-03-08
2175.45
972.30
673.20
159.85
863.40
13-03-08
2103.65
951.25
697.60
140.00
869.70
14-03-08
2117.00
959.65
696.10
149.00
877.35
15-03-08
2030.10
933.65
671.85
142.85
829.70
18-03-08
2007.40
917.75
668.45
147.35
822.00
19-03-08
1955.75
904.20
652.30
145.00
810.65
20-03-08
2079.25
926.60
640.25
142.00
824.00
21-03-08
2045.85
954.15
635.30
140.95
823.90
22-03-08
2103.10
965.95
650.60
144.90
870.35
25-03-08
2230.05
1023.25
681.05
149.30
899.30
26-03-08
2279.50
1011.85
679.65
144.20
894.55
27-03-08
2254.70
975.60
667.95
142.60
876.00
28-03-08
2281.45
955.45
655.95
143.40
857.60
29-03-08
2278.90
933.05
679.70
146.75
855.60
31-03-08
2260.75
949.40
685.15
150.40
853.10
DATE
ONGC
RELIANCE
SBI
TATA
WIPRO
MOTORS
01-03-07
790.60
1354.60
1039.15
783.95
560.85
02-03-07
799.20
1366.75
1052.55
789.25
589.40
03-03-07
800.00
1317.35
1008.45
774.50
573.20
06-03-07
773.35
1259.20
962.35
736.30
537.15
07-03-07
770.10
1299.40
991.20
726.30
580.75
08-03-07
765.60
1289.35
964.50
740.60
556.55
09-03-07
780.00
1334.80
1000.30
770.30
576.75
10-03-07
780.00
1334.80
1000.30
770.30
576.75
13-03-07
793.40
1316.00
976.80
764.40
573.00
14-03-07
807.25
1326.90
980.70
773.20
581.90
15-03-07
780.25
1285.05
947.50
745.15
555.25
16-03-07
774.65
1283.75
921.90
725.85
561.15
17-03-07
762.20
1299.80
914.40
749.45
565.90
20-03-07
793.05
1314.00
928.30
770.85
579.05
21-03-07
790.55
1321.05
952.60
769.70
573.30
22-03-07
812.70
1340.05
982.15
776.05
581.65
23-03-07
852.25
1374.25
992.00
780.00
595.15
24-03-07
843.20
1379.20
1027.10
789.00
600.90
27-03-07
853.20
1365.20
1031.60
753.85
586.15
29-03-07
866.30
1348.65
974.20
718.80
558.20
30-03-07
873.45
1356.10
986.45
715.10
565.55
31-03-07
878.15
1368.35
992.90
727.75
558.35
1. Calculation of standard deviation of BHEL Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
2176.00
2130.72
45.28
2050.28
02-03-07
2172.20
2130.72
41.48
1720.59
03-03-07
2099.60
2130.72
-31.12
968.45
06-03-07
2010.05
2130.72
-120.67
14561.25
07-03-07
2026.55
2130.72
-104.17
10851.39
08-03-07
2015.15
2130.72
-115.57
13356.42
09-03-07
2175.45
2130.72
44.73
2000.77
10-03-07
2175.45
2130.72
44.73
2000.77
13-03-07
2103.65
2130.72
-27.07
732.78
14-03-07
2117.00
2130.72
-13.72
188.24
15-03-07
2030.10
2130.72
-100.62
10124.38
16-03-07
2007.40
2130.72
-123.32
15207.82
17-03-07
1955.75
2130.72
-174.97
30614.50
20-03-07
2079.25
2130.72
-51.47
2649.16
21-03-07
2043.85
2130.72
-86.87
7546.39
22-03-07
2103.10
2130.72
-27.62
762.86
23-03-07
2230.05
2130.72
99.33
9866.45
24-03-07
2279.50
2130.72
148.78
22135.49
27-03-07
2254.70
2130.72
123.98
15371.04
29-03-07
2281.45
2130.72
150.73
22719.53
30-03-07
2278.90
2130.72
148.18
21957.31
31-03-07
2260.75
2130.72
130.03
16907.80
X=46875.9
d2=224293.67
Average Return
=
= (TOTAL RETURN)/NO OF DAYS

46875.9
22
=
Variance
2130.72
1/n-1* (Xi-X)]
1/22-1 (224293.67
10680.65
Standard Deviation =
=
Variance
10680.65
= 103.34
2. Calculation of standard deviation of HDFC Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
932.60
952.43
-19.83
393.23
02-03-07
981.10
952.43
28.67
821.97
03-03-07
947.70
952.43
-4.73
22.37
06-03-07
935.00
952.43
-17.43
303.80
07-03-07
935.65
952.43
-16.78
281.57
08-03-07
915.65
952.43
-36.78
1352.77
09-03-07
972.30
952.43
19.87
394.82
10-03-07
972.30
952.43
19.87
394.82
13-03-07
951.25
952.43
-1.18
1.39
14-03-07
959.65
952.43
7.22
52.13
15-03-07
933.10
952.43
-19.33
373.65
16-03-07
917.75
952.43
-34.68
1202.70
17-03-07
904.20
952.43
-48.23
2326.13
20-03-07
926.60
952.43
-25.83
667.19
21-03-07
954.15
952.43
1.72
2.96
22-03-07
965.95
952.43
13.52
182.79
23-03-07
1023.25
952.43
70.82
5015.47
24-03-07
1011.85
952.43
59.42
3530.74
27-03-07
975.60
952.43
23.17
536.85
29-03-07
955.45
952.43
3.02
9.12
30-03-07
933.05
952.43
-19.38
375.58
31-03-07
949.40
952.43
-3.03
9.18
X=20953.55
d2=18251.23
Average Return
=

20953.5
22
=
Variance
952.43
1/n-1* (Xi-X)]
1/22-1 (18251.23)
869.106
=
Variance
869.106
= 29.48
3. Calculation of standard deviation of BHARATI TELEVENTURES Company

X
DATE
Share price
Average
d2
X-X=d
Deviation
Squared
deviation
01-03-07
675.60
670.95
4.65
21.62
02-03-07
667.15
670.95
-3.8
14.44
03-03-07
691.75
670.95
20.8
432.64
06-03-07
684.45
670.95
13.5
182.25
07-03-07
666.85
670.95
-4.1
16.81
08-03-07
666.95
670.95
-4
16
09-03-07
673.20
670.95
2.25
5.063
10-03-07
673.20
670.95
2.25
5.063
13-03-07
697.60
670.95
26.65
710.22
14-03-07
696.10
670.95
25.15
632.52
15-03-07
671.85
670.95
0.9
0.81
16-03-07
668.45
670.95
-2.5
6.25
17-03-07
652.45
670.95
-18.5
342.25
20-03-07
640.25
670.95
-30.7
942.49
21-03-07
635.30
670.95
-35.65
1270.92
22-03-07
650.60
670.95
-20.35
414.12
23-03-07
681.05
670.95
10.1
102.01
24-03-07
679.65
670.95
8.7
75.69
27-03-07
667.95
670.95
29-03-07
655.95
670.95
-15
225
30-03-07
679.70
670.95
8.75
76.56
31-03-07
685.15
670.95
14.2
X=14761.05
Average Return
14761.05
22
=
Variance
670.95
1/n-1* (Xi-X)]
1/22-1 (5763.37)
274.44
=
Variance
274.44
= 16.56
201.64
d2=5763.37
4. Calculation of standard deviation of ITC LTD Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
171.85
151.91
19.94
397.60
02-03-07
172.50
151.91
20.59
423.95
03-03-07
166.55
151.91
14.64
214.33
06-03-07
162.50
151.91
10.59
112.15
07-03-07
162.05
151.91
10.14
102.82
08-03-07
158.25
151.91
6.34
40.19
09-03-07
159.85
151.91
7.94
63.04
10-03-07
159.85
151.91
7.94
63.04
13-03-07
140.00
151.91
-11.91
141.85
14-03-07
149.00
151.91
-2.91
8.47
15-03-07
142.85
151.91
-9.06
82.08
16-03-07
147.35
151.91
-4.56
20.79
17-03-07
145.00
151.91
-6.91
47.75
20-03-07
142.00
151.91
-9.91
98.21
21-03-07
140.95
151.91
-10.96
120.12
22-03-07
144.90
151.91
-7.01
49.14
23-03-07
149.30
151.91
-2.61
6.81
24-03-07
144.20
151.91
-7.71
59.44
27-03-07
142.60
151.91
-9.31
86.68
29-03-07
143.40
151.91
-8.51
72.42
30-03-07
146.75
151.91
-5.16
26.63
31-03-07
150.40
151.91
-1.51
2.28
X=3342.1
d2=2239.79
Average Return
3342.1
22
=
Variance
151.91
=
1/n-1* (Xi-X)]
1/22-1 (2239.79)
106.65
=
Variance
106.65
= 10.32
5. Calculation of standard deviation of ICICI LTD Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
831.90
851.03
-19.13
365.96
02-03-07
855.35
851.03
4.32
18.66
03-03-07
845.85
851.03
-5.18
26.83
06-03-07
820.70
851.03
30.33
919.91
07-03-07
851.60
851.03
0.57
0.32
08-03-07
826.60
851.03
-24.43
596.82
09-03-07
863.40
851.03
12.37
153.02
10-03-07
863.40
851.03
12.37
153.02
13-03-07
869.70
851.03
18.67
348.57
14-03-07
877.35
851.03
26.32
692.74
15-03-07
829.70
851.03
-21.33
454.97
16-03-07
822.00
851.03
-29.03
842.74
17-03-07
810.65
851.03
-40.38
1603.54
20-03-07
824.00
851.03
-27.03
730.62
21-03-07
823.90
851.03
-27.13
736.04
22-03-07
870.35
851.03
19.32
373.26
23-03-07
899.30
851.03
48.27
2329.99
24-03-07
894.55
851.03
43.52
1893.99
27-03-07
876.00
851.03
24.97
623.50
29-03-07
875.60
851.03
6.57
43.16
30-03-07
855.60
851.03
4.57
20.88
31-03-07
853.10
851.03
2.07
X=18722.6
Average Return
18722.6
22
=
Variance
851.03
=
1/n-1* (Xi-X)]
1/22-1 (12950.82)
616.70
=
Variance
616.70
= 24.83
4.28
d2=12950.82
6. Calculation of standard deviation of ONGC Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
790.60
806.36
-15.76
248.38
02-03-07
799.20
806.36
-7.16
51.26
03-03-07
800.00
806.36
-6.36
40.45
06-03-07
773.35
806.36
-33.01
1089.66
07-03-07
770.10
806.36
-36.26
1314.79
08-03-07
765.60
806.36
-40.76
1661.38
09-03-07
780.00
806.36
-26.36
694.85
10-03-07
780.00
806.36
-26.36
694.85
13-03-07
793.40
806.36
-1.96
3.84
14-03-07
807.25
806.36
0.89
0.79
15-03-07
780.25
806.36
-26.11
681.73
16-03-07
774.65
806.36
-31.71
1005.52
17-03-07
762.20
806.36
-44.16
1950.11
20-03-07
793.05
806.36
-13.31
177.16
21-03-07
790.55
806.36
-15.81
249.96
22-03-07
812.70
806.36
6.34
40.19
23-03-07
852.25
806.36
45.89
2105.89
24-03-07
843.20
806.36
36.84
1357.18
27-03-07
853.20
806.36
46.84
2193.98
29-03-07
866.30
806.36
59.94
3592.80
30-03-07
873.45
806.36
67.09
4501.07
31-03-07
878.15
806.36
71.79
5153.80
X=17739.9
d2=30687.99
Average Return
17739.9
22
=
Variance
806.36
1/n-1* (Xi-X)]
1/22-1 (30687.99)
1461.33
=
Variance
1461.33
= 38.22
7. Calculation of standard deviation of RELIANCE Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
1354.60
1328.87
25.73
662.03
02-03-07
1366.75
1328.87
37.88
1434.89
03-03-07
1317.35
1328.87
-11.52
132.71
06-03-07
1259.20
1328.87
-69.67
4853.91
07-03-07
1299.40
1328.87
-29.47
868.48
08-03-07
1289.35
1328.87
-39.52
1561.83
09-03-07
1334.80
1328.87
5.93
35.16
10-03-07
1334.80
1328.87
5.93
35.16
13-03-07
1316.00
1328.87
-12.87
165.64
14-03-07
1326.90
1328.87
-1.97
3.88
15-03-07
1285.50
1328.87
-43.37
1880.96
16-03-07
1283.75
1328.87
-45.12
2035.81
17-03-07
1299.80
1328.87
-29.07
845.06
20-03-07
1314.00
1328.87
-14.87
221.11
21-03-07
1321.05
1328.87
-7.82
61.15
22-03-07
1340.05
1328.87
11.18
124.99
23-03-07
1374.25
1328.87
45.38
2059.34
24-03-07
1379.20
1328.87
50.33
2533.11
27-03-07
1365.20
1328.87
36.33
1319.87
29-03-07
1348.65
1328.87
19.78
391.25
30-03-07
1356.10
1328.87
27.23
741.47
31-03-07
1368.35
1328.87
39.48
X=29235.05
Average Return
29235.05
22
=
Variance
1328.87
1/n-1* (Xi-X)]
1/22-1 (23556.48)
1121.73
=
Variance
1121.73
= 33.49
1558.97
d2=23556.48
8. Calculation of standard deviation of STATE BANK Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
1039.15
983.06
56.09
3146.09
02-03-07
1052.55
983.06
69.49
4828.86
03-03-07
1088.45
983.06
105.39
11107.05
06-03-07
962.35
983.06
-20.71
428.90
07-03-07
991.20
983.06
8.14
66.26
08-03-07
964.50
983.06
-18.56
344.47
09-03-07
1000.30
983.06
17.24
297.21
10-03-07
1000.30
983.06
17.27
297.21
13-03-07
976.80
983.06
-6.26
39.19
14-03-07
980.70
983.06
-2.36
5.57
15-03-07
947.50
983.06
-35.56
1264.51
16-03-07
921.90
983.06
-61.16
3740.54
17-03-07
914.40
983.06
-68.66
4714.19
20-03-07
928.30
983.06
-54.76
2998.66
21-03-07
952.60
983.06
-30.46
927.81
22-03-07
982.15
983.06
-0.91
0.83
23-03-07
992.00
983.06
8.94
79.92
24-03-07
1027.10
983.06
44.04
1939.52
27-03-07
1013.60
983.06
48.54
2356.13
29-03-07
974.20
983.06
-8.86
78.49
30-03-07
986.45
983.06
3.39
11.49
31-03-07
992.90
983.06
9.84
96.82
X=21627.4
d2=38769.72
Average Return

=
21627.4
22
=
Variance
983.06
1/n-1* (Xi-X)]
1/22-1 (38769.72)
1846.177
=
Variance
1846.177
= 42.96
9. Calculation of standard deviation of TATAMOTORS Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
783.95
756.87
27.08
733.33
02-03-07
789.25
756.87
32.38
1048.46
03-03-07
774.50
756.87
17.63
310.82
06-03-07
736.30
756.87
-20.57
423.12
07-03-07
726.30
756.87
-30.57
934.52
08-03-07
740.60
756.87
-16.27
264.71
09-03-07
770.30
756.87
13.43
180.36
10-03-07
770.30
756.87
13.43
180.36
13-03-07
764.40
756.87
7.53
56.70
14-03-07
773.20
756.87
16.33
266.67
15-03-07
745.15
756.87
-11.72
137.36
16-03-07
725.85
756.87
-31.02
962.24
17-03-07
749.45
756.87
-7.42
55.06
20-03-07
770.85
756.87
13.98
195.44
21-03-07
769.70
756.87
12.83
164.61
22-03-07
776.05
756.87
19.18
367.87
23-03-07
780.00
756.87
23.13
534.99
24-03-07
789.00
756.87
32.13
1032.34
27-03-07
753.85
756.87
-3.02
9.12
29-03-07
718.80
756.87
-38.07
1449.32
30-03-07
715.10
756.87
-41.77
1744.73
31-03-07
727.75
756.87
-29.12
X=16651.1
Average Return
=

16651.1
22
=
Variance
756.87
1/n-1* (Xi-X)]
1/22-1 (11900.1)
566.67
=
Variance
566.67
= 23.80
847.97
d2=11900.1
10. Calculation of standard deviation of WIPRO Company

X
DATE
Share price
Average
X-X=d
Deviation
d2
Squared
deviation
01-03-07
560.85
572.13
-11.28
127.24
02-03-07
589.40
572.13
17.27
298.25
03-03-07
573.20
572.13
1.07
1.14
06-03-07
537.15
572.13
-34.98
1223.60
07-03-07
580.75
572.13
8.62
74.30
08-03-07
556.55
572.13
-15.58
242.74
09-03-07
576.75
572.13
4.62
21.34
10-03-07
576.75
572.13
4.62
21.34
13-03-07
573.00
572.13
0.87
0.76
14-03-07
581.90
572.13
9.77
95.45
15-03-07
555.25
572.13
-16.88
284.93
16-03-07
561.15
572.13
-10.98
120.56
17-03-07
565.90
572.13
-6.23
38.81
20-03-07
579.05
572.13
6.92
47.89
21-03-07
573.30
572.13
1.17
1.37
22-03-07
581.65
572.13
9.52
90.63
23-03-07
595.15
572.13
23.02
529.92
24-03-07
600.90
572.13
28.77
827.71
27-03-07
586.15
572.13
14.02
196.56
29-03-07
558.20
572.13
-13.93
194.04
30-03-07
565.55
572.13
-6.58
43.29
31-03-07
558.35
572.13
-13.78
189.89
X=12586.9
d2=4671.76
Average Return
12586.9
22
=
Variance
572.13
1/n-1* (Xi-X)]
1/22-1 (4671.76)
222.46
=
=
Variance
222.46
14.91
1. Correlation between BHEL and HDFC

DATE
Deviation of BHEL
Deviation of HDFC
Production
deviation
01-03-07
45.28
-19.83
-897.90
02-03-07
41.48
28.67
1189.23
03-03-07
-31.12
-4.73
147.19
06-03-07
-120.67
-17.43
2103.28
07-03-07
-104.17
-16.78
1747.97
08-03-07
-115.57
-36.78
4250.66
09-03-07
44.73
19.87
888.79
10-03-07
44.73
19.87
888.79
13-03-07
-27.07
-1.18
31.94
14-03-07
-13.72
7.22
-99.06
15-03-07
-100.62
-19.33
1944.98
16-03-07
-123.32
-34.68
4276.74
17-03-07
-174.97
-48.23
8438.80
20-03-07
-51.47
-25.83
1329.47
21-03-07
-86.87
1.72
-149.42
22-03-07
-27.62
13.52
-373.42
23-03-07
99.33
70.82
7034.55
24-03-07
148.78
59.42
8840.51
27-03-07
123.98
23.17
2872.62
29-03-07
150.73
3.02
455.20
30-03-07
148.16
-19.38
-2871.34
31-03-07
130.03
-3.03
-393.99
dxdy=41655.59
Covariance =
(x-x) (y-y)
N-1
= 41655.59/22-1
= 1983.59
Correlation Coefficient rab =
COV (ab)
(a)(b)
1983.59
(103.34) (29.48)
0.65
2. Correlation between HDFC & BHARATI TELEVENTURES LTD

DATE
Deviation of HDFC
Deviation
of
BHARATI Production
TELEVENTURES
deviation
01-03-07
-19.83
4.65
-92.20
02-03-07
28.67
-3.8
108.95
03-03-07
-4.73
20.8
-98.38
06-03-07
-17.43
13.5
-235.31
07-03-07
-16.78
-4.1
68.79
08-03-07
-36.78
-4
147.12
09-03-07
19.87
2.25
44.71
10-03-07
19.87
2.25
44.71
13-03-07
-1.18
26.65
-31.45
14-03-07
7.22
25.15
181.58
15-03-07
-19.33
0.9
-17.39
16-03-07
-34.68
-2.5
86.7
17-03-07
-48.23
-18.5
892.26
20-03-07
-25.83
-30.7
792.98
21-03-07
1.72
-35.65
-61.32
22-03-07
13.52
-20.35
-275.13
23-03-07
70.82
10.1
715.28
24-03-07
59.42
8.7
516.95
27-03-07
23.17
69.51
29-03-07
3.02
-15
-45.3
30-03-07
-19.38
8.75
-169.58
31-03-07
-3.03
14.2
-43.03
dxdy=2600.45
Covariance =
(x-x) (y-y)
N-1
= 2600.45/22-1
= 123.83
COV (ab)
(a)(b)
123.83
(29.48)(16.56)
= 0.25
3. Correlation between BHARATI TELEVENTURES and ITC LTD

DATE
Deviation
BHARATI
of Deviation
of
ITC Production
LTD
deviation
TELEVENTURES
01-03-07
4.65
19.94
92.72
02-03-07
-3.8
20.59
-78.24
03-03-07
20.8
14.64
304.51
06-03-07
13.5
10.59
142.96
07-03-07
-4.1
10.14
-41.57
08-03-07
-4
6.34
-25.36
09-03-07
2.25
7.94
17.86
10-03-07
2.25
7.94
17.86
13-03-07
26.65
-11.91
-317.40
14-03-07
25.15
-2.91
-73.19
15-03-07
0.9
-9.06
-8.15
16-03-07
-2.5
-4.56
11.4
17-03-07
-18.5
-6.91
127.83
20-03-07
-30.7
-9.91
304.24
21-03-07
-35.65
-10.96
390.72
22-03-07
-20.35
-7.01
142.65
23-03-07
10.1
-2.61
-26.36
24-03-07
8.7
-7.71
-62.38
27-03-07
-9.31
-27.93
29-03-07
-15
-8.51
127.65
30-03-07
8.75
-5.16
-45.115
31-03-07
14.2
-1.51
-21.44
dxdy=953.23
Covariance =
(x-x) (y-y)
N-1
= 953.23/22-1
= 45.39
COV (ab)
(a)(b)
45.39
(16.56) (10.32)
= 0.26
4.
Correlation between ITC & ICICI LTD
DATE
Deviation
of
ITC Deviation of ICICI
LTD
Production
deviation
01-03-07
19.94
-19.13
-381.45
02-03-07
20.59
4.32
88.95
03-03-07
14.64
-5.18
-75.84
06-03-07
10.59
30.33
321.19
07-03-07
10.14
0.57
5.78
08-03-07
6.34
-24.43
-154.89
09-03-07
7.94
12.37
98.23
10-03-07
7.94
12.37
98.23
13-03-07
-11.91
18.67
-222.36
14-03-07
-2.91
26.32
-76.59
15-03-07
-9.06
-21.33
193.25
16-03-07
-4.56
-29.03
132.38
17-03-07
-6.91
-40.38
279.03
20-03-07
-9.91
-27.03
267.86
21-03-07
-10.96
-27.13
297.34
22-03-07
-7.01
19.32
-135.43
23-03-07
-2.61
48.27
-125.98
24-03-07
-7.71
43.52
-335.54
27-03-07
-9.31
24.97
-232.47
29-03-07
-8.51
6.57
-55.91
30-03-07
-5.16
4.57
-23.58
31-03-07
-1.51
2.07
-3.13
dxdy=40.93
Covariance =
(x-x) (y-y)
N-1
= 40.93 /22-1
= 1.949
COV (ab)
(a)(b)
1.949
(10.32) (24.83)
= 0.007
5. Correlation between ICICI and ONGC LTD

DATE
Deviation of ICICI
Deviation of ONGC Production

LTD
deviation
01-03-07
-19.13
-15.76
301.49
02-03-07
4.32
-7.16
-30.93
03-03-07
-5.18
-6.36
32.94
06-03-07
30.33
-33.01
1001.19
07-03-07
0.57
-36.26
-36.83
08-03-07
-24.43
-40.76
995.77
09-03-07
12.37
-26.36
-326.07
10-03-07
12.37
-26.36
-326.07
13-03-07
18.67
-1.96
-36.59
14-03-07
26.32
0.89
23.42
15-03-07
-21.33
-26.11
556.93
16-03-07
-29.03
-31.71
920.54
17-03-07
-40.38
-44.16
1783.18
20-03-07
-27.03
-13.31
359.77
21-03-07
-27.13
-15.81
428.93
22-03-07
19.32
6.34
122.49
23-03-07
48.27
45.89
2215.11
24-03-07
43.52
36.84
1603.27
27-03-07
24.97
46.84
1169.59
29-03-07
6.57
59.94
393.81
30-03-07
4.57
67.09
306.60
31-03-07
2.07
71.79
148.61
dxdy=11607.67
Covariance =
(x-x) (y-y)
N-1
= 11607.67/22-1
= 552.74
Correlation Coefficient rab = COV (ab)
(a)(b)
= 552.74/ (24.83) (38.22)
= 0.58
6. Correlation between ONGC & RELIANCELTD

DATE
Deviation of ONGC Deviation
of Production
LTD
RELIANCE
deviation
01-03-07
-15.76
25.73
-405.50
02-03-07
-7.16
37.88
-271.22
03-03-07
-6.36
-11.52
73.27
06-03-07
-33.01
-69.67
2299.81
07-03-07
-36.26
-29.47
1068.58
08-03-07
-40.76
-39.52
1610.84
09-03-07
-26.36
5.93
-156.31
10-03-07
-26.36
5.93
-156.31
13-03-07
-1.96
-12.87
25.23
14-03-07
0.89
-1.97
-1.75
15-03-07
-26.11
-43.37
1132.39
16-03-07
-31.71
-45.12
1430.75
17-03-07
-44.16
-29.07
1283.73
20-03-07
-13.31
-14.87
197.92
21-03-07
-15.81
-7.82
123.63
22-03-07
6.34
11.18
70.88
23-03-07
45.89
45.38
2082.49
24-03-07
36.84
50.33
1854.16
27-03-07
46.84
36.33
1701.69
29-03-07
59.94
19.78
1185.61
30-03-07
67.09
27.23
1826.86
31-03-07
71.79
39.48
2834.27
dxdy=19811.02
Covariance =
(x-x) (y-y)
N-1
= 19811.02 /22-1
= 943.38
COV (ab)
(a)(b)
943.38
(38.22) (33.49)
= 0.74
7. Correlation between RELIANCE and SBI LTD

DATE
Deviation
of Deviation of SBI
RELIANCE
Production
deviation
01-03-07
25.73
56.09
1443.19
02-03-07
37.88
69.49
2623.28
03-03-07
-11.52
105.39
-1214.09
06-03-07
-69.67
-20.71
1442.87
07-03-07
-29.47
8.14
-239.89
08-03-07
-39.52
-18.56
733.49
09-03-07
5.93
17.24
102.23
10-03-07
5.93
17.27
102.23
13-03-07
-12.87
-6.26
80.57
14-03-07
-1.97
-2.36
4.65
15-03-07
-43.37
-35.56
1542.24
16-03-07
-45.12
-61.16
2759.54
17-03-07
-29.07
-68.66
1995.95
20-03-07
-14.87
-54.76
814.28
21-03-07
-7.82
-30.46
238.19
22-03-07
11.18
-0.91
-10.17
23-03-07
45.38
8.94
405.69
24-03-07
50.33
44.04
2216.53
27-03-07
36.33
48.54
1763.46
29-03-07
19.78
-8.86
-175.25
30-03-07
27.23
3.39
92.51
31-03-07
39.48
9.84
390.46
dxdy=17120.96
Covariance =
(x-x) (y-y)
N-1
= 17120.96/22-1
= 815.28
(a)(b)
=
815.28
(33.49) (42.96)
= 0.56
8. Correlation between SBI & TATAMOTORS LTD

DATE
Deviation of SBI
Deviation of TATA Production

MOTOR
deviation
01-03-07
56.09
27.08
1518.92
02-03-07
69.49
32.38
2250.09
03-03-07
105.39
17.63
1858.03
06-03-07
-20.71
-20.57
426.00
07-03-07
8.14
-30.57
-248.84
08-03-07
-18.56
-16.27
301.97
09-03-07
17.24
13.43
231.53
10-03-07
17.27
13.43
231.94
13-03-07
-6.26
7.53
-47.14
14-03-07
-2.36
16.33
-38.54
15-03-07
-35.56
-11.72
416.76
16-03-07
-61.16
-31.02
1897.18
17-03-07
-68.66
-7.42
509.46
20-03-07
-54.76
13.98
-765.54
21-03-07
-30.46
12.83
-390.80
22-03-07
-0.91
19.18
-17.45
23-03-07
8.94
23.13
206.78
24-03-07
44.04
32.13
1415.01
27-03-07
48.54
-3.02
-146.59
29-03-07
-8.86
-38.07
337.30
30-03-07
3.39
-41.77
-141.60
31-03-07
9.84
-29.12
-286.54
dxdy=9517.93
Covariance =
(x-x) (y-y)
N-1
= 9517.93 /22-1
= 453.23
COV (ab)
(a)(b)
453.23
(42.96) (23.80)
= 0.44
9. Correlation between TATA MOTORS and WIPRO

DATE
Deviation of TATA Deviation of WIPRO Production

MOTOR
deviation
01-03-07
27.08
-11.28
-305.46
02-03-07
32.38
17.27
559.20
03-03-07
17.63
1.07
18.86
06-03-07
-20.57
-34.98
719.54
07-03-07
-30.57
8.62
-263.51
08-03-07
-16.27
-15.58
253.49
09-03-07
13.43
4.62
62.05
10-03-07
13.43
4.62
62.05
13-03-07
7.53
0.87
6.55
14-03-07
16.33
9.77
159.54
15-03-07
-11.72
-16.88
197.83
16-03-07
-31.02
-10.98
340.59
17-03-07
-7.42
-6.23
46.23
20-03-07
13.98
6.92
96.74
21-03-07
12.83
1.17
15.01
22-03-07
19.18
9.52
182.59
23-03-07
23.13
23.02
532.45
24-03-07
32.13
28.77
924.38
27-03-07
-3.02
14.02
-472.34
29-03-07
-38.07
-13.93
530.32
30-03-07
-41.77
-6.58
291.55
31-03-07
-29.12
-13.78
401.27
dxdy=4788.93
Covariance
=
(x-x) (y-y)
N-1
= 4788.93/22-1
= 228.04

(a)(b)
=
228.04
(23.80) (14.91)
= 0.64
Calculation of Portfolio Weight

Deriving the Minimum risk portfolio the following formula is used
(b)2 rab (a) (b)
Wa =
(a)2 + (b)2 2(rab)(a)(b)
Where
Xa is proportion of 1st security

Xb is proportion of 2nd security
a is standard deviation of 1st security
b is standard deviation of 2nd security
1. Portfolio Weight BHEL AND HDFC

Calculation of portfolio weight between two companies
a = 103.34; b= 29.48; rab=0.65
(29.48)2 (0.65) (103.34) (29.48)
Wa =
(103.34)2 + (29.48)2 2(0.65) (103.34) (29.48)
=
-1111.13
7587.82
Wa
= -0.15
Wb = 1 Wa
Wb = 1 (- 0.15)
Wb = 1.15
2. Portfolio Weight HDFC AND BHARATI TELEVENTURES
a = 29.48; b =16.56; rab = 0.25
(16.56)2 (0.25) (29.48) (16.56)
Wa =
(29.48)2 + (16.56)2 2(0.25) (29.48) (16.56)
152.18
=
899.2
Wa = 0.17
Wb = 1 Wa
Wb = 1 0.17
Wb = 0.83
3. Portfolio Weight BHARATI TELEVENTURES AND ITC

a = 16.56; b= 10.32; rab = 0.26
(10.32)2 (0.26)(16.56)(10.32)
Wa =
(16.56)2 + (10.32)2 2(0.26)(16.56)(10.32)
62.07
291.87
Wa = 0.21
Wb = 1 Wa
Wb = 1 (0.21)
Wb = 0.79
4. Portfolio Weight ITC AND ICICI
a = 10.32; b = 24.83; rab= 0.007
(24.83)2 (0.007) (10.32) (24.83)
Wa =
(10.32)2 + (24.83)2 2(0.007) (10.32) (24.83)
614.74
=
719.44
Wa = 0.85
Wb = 1 Wa
Wb = 1 (0.85)
Wb = 0.15
5. Portfolio Weight ICICI AND ONGC

a = 24.83; b=38.22; rab = 0.58
(38.22)2 (0.58) (24.83) (38.22)
Wa =
(24.83)2 + (38.22)2 2(0.58) (24.83) (38.22)
910.34
=
976.44
Wa = 0.93
Wb = 1 Wa
Wb = 1 (0.93)
Wb = 0.07
6. Portfolio Weight ONGC AND RELIANCE
a = 38.2; b = 33.49; rab = 0.74
(33.49)2 (0.74) (38.22) (33.49)
Wa =
(38.22)2 + (33.49)2 2(0.74) (38.22) (33.49)
174.39
=
687.97
Wa = 0.25
Wb = 1 Wa
Wb = 1 (0.25)
Wb = 0.75
7. Portfolio Weight RELIANCE AND SBI

a = 33.49; b = 42.96; rab = 0.56
(42.96)2 (0.56) (33.49) (42.96)
Wa =
(33.49)2 + (42.96)2 2(0.56) (33.49) (42.96)
1039.88
=
1355.77
Wa
= 0.76
Wb = 1 Wa
Wb = 1 (0.76)
Wb = 0.24
8. Portfolio Weight SBI AND TATAMOTOR
a = 42.96; b = 23.80; rab = 0.44
(23.80)2 (0.44) (42.96) (23.80)
Wa =
(4.96)2 + (23.80)2 2(0.44) (42.96) (23.80)
116.56
=
1512.25
Wa = 0.08
Wb = 1 Wa
Wb = 1 (0.08)
Wb = 0.92
9. Portfolio Weight TATAMOTOR AND WIPRO

a = 23.80; b = 14.91; rab = 0.64
(14.91)2 (0.64) (23.80) (14.91)
Wa =
(23.80)2 + (14.91)2 2(0.64) (23.80) (14.91)
222.308-227.10
=
566.44+222.30-454.22
-4.792
=
334.53
Wa = -0.01
Wb = 1 Wa
Wb = 1 (-0.01)
Wb = 1.01
PORTFOLIO RISK
It is calculated with the help of following formula,
p =
a2*Wa2 + b2*Wb2 + 2rab*a*b*WA*Wb
Where, p = Portfolio risk

Wa= Proportion of Investment in security 1
Wb = Proportion of Investment in security 2
a = Standard deviation of security 1
b = Standard deviation of security 2
rab= Correlation Co-efficient between security 1&2
PORTFOLIO RETURN
It is calculated with the help of following formula
PR= (Xa*Wa) + (Xb*Wb)
Where
Xa= Average return of 1st security
Wa= Weight of 1st security
Xb= Average return of 2nd security

Wb= Weight of 2nd security
1. Portfolio Risk and Return between BHEL AND HDFC

a =103.34; b =29.48; Wa =-0.15; Wb =1.15; rab =0.65;
Xa=2130.72; Xb=952.43
p =
(103.34)2*(-0.15)2+ (29.48)2*(1.15)2+2(0.65) (103.34)
(29.48) (-0.15) (1.15)
677.58
= 26.03
Return = (2130.72*-0.15) + (952.43*1.15)
= 775.7
CONCLUSUION OF BHEL AND HDFC

As per the calculation the BHEL bears a proportion of -0.15 and where as HDFC bears a
proportion of 1.15. The expected returns of the BHEL are 2130.72and HDFC is 952.43. The
variance of the BHEL is 10680.65 and HDFC is 869.106. The standard deviation between the
companies is 103.34% for BHEL and 29.48% for HDFC.
In the combination the risk of the HDFC is less than the BHEL comparisons, therefore
investor can invest combined money or fund in HDFC where as the portfolio risk, combined risk
between two is 26.03% which is less than BHEL and HDFC. Portfolio returns between two
companies is 775.7%
2. Portfolio Risk and Return between HDFC AND BHARATI TELEVENTURES

a =29.48; b =16.56; Wa=0.17; Wb =0.83; rab =0.25;
Xa=952.43; Xb=670.95
p =
(29.48)2*(0.17)2+ (16.56)2*(0.82)2+2(0.25) (29.48) (16.56)

(0.17)(0.83)
248.86
= 15.77
Return = (952.43*0.17) + (670.95*0.83)
= 718.80
CONCLUSUION OF HDFC AND BHARATI TELEVENTURES

As per the calculation the HDFC bears a proportion of 0.17 and where as HEROHONDA
bears a proportion of 0.83. The expected returns of the HDFC are 952.43 and HEROHONDA is
670.95. The variance of the HDFC is 869.106 and HEROHONDA is 274.44. The standard
deviation between the companies is 29.48% for HDFC and 16.56% for HEROHONDA.
In the combination the risk of the HDFC is less than the BHEL comparisons, therefore
investor can invest combined money or fund in HDFC where as the portfolio risk, combined risk
between two is 15.77% which is less than HDFC and HEROHONDA. Portfolio returns between
two companies is 718.8%
3. Portfolio Risk and Return between BHARATI TELEVENTURES AND ITC

a =16.56; b =10.32; Wa =0.21; Wb =0.79; rab =0.26;
Xa=670.95; Xb=151.91
p =
(16.56)2*(0.21)2+ (10.32)2*(0.79)2+2(0.26) (16.56) (10.32)

(0.21)(0.79)
91.73
= 9.57
Return = (670.95* 0.21) + (151.91* 0.79)
= 260.8
CONCLUSUION OF BHARATI TELEVENTURES AND ITC LTD

As per the calculation the HERO HONDA bears a proportion of 0.21 and where as ITC LTD
bears a proportion of 0.79. The expected returns of the HERO HONDA are 670.95and ITC is
151.91. The variance of the HERO HONDA is 274.44 and ITC LTD is 106.65 the standard
deviation between the companies is 16.56% for HERO HONDA and 10.32% for ITC LTD.
In the combination the risk of the ITC LTD is less than the HERO HONDA comparisons,
therefore investor can invest combined money or fund in ITC LTD where as the portfolio risk,
combined risk between two is 9.57% which is less than HERO HONDA and ITC LTD. Portfolio
returns between two companies is 260.8%
4. Portfolio Risk and Return between ITC AND ICICI

a =10.32; b =24.83; Wa=0.85; Wb =0.15; rab =0.007; Xa=151.91
Xb=851.03
p =
(10.32)2*(0.85)2+ (24.83)2*(0.15)2+2(0.007)(10.32)(24.83)
(0.85)(0.15)
89.47
= 9.47
Return = (151.91*0.85) + (851.03*0.15)
= 256.77
CONCLUSUION OF ITC AND ICICI LTD

As per the calculation the ITC LTD bears a proportion of 0.85 and where as ICICI bears a
proportion of 0.15. The expected returns of the ITC LTD are 151.91and ICICI is 851.03. The
variance of the ITC LTD is 106.65 and ICICI is 616.70 the standard deviation between the
companies is 10.32% for ITC LTD and 24.83% for ICICI LTD.
In the combination the risk of the ITC LTD is less than the ICICI comparisons, therefore
investor can invest combined money or fund in ITC LTD where as the portfolio risk, combined
risk between two is 9.47% which is less than ITC LTD AND ICICI. Portfolio returns between two
companies is 256.77%
5. Portfolio Risk and Return between ICICI AND ONGC

a =24.83; b =38.22; Wa=0.93; Wb =0.07; rab =0.58;
Xa=951.03; Xb=806.36
p =
(24.83)2*(0.93)2+ (38.22)2*(0.07)2+2(0.58) (24.83)

(38.22)(0.93)(0.07)
7759.64
= 88.08
Return = (851.03*0.93) + (806.36*0.07)
= 847.8
CONCLUSUION OF ICICI AND ONGC

As per the calculation the ICICI bears a proportion of 0.93 and where as ONGC bears a
proportion of 0.07. The expected returns of the ICICI are 851.03 and ONGC is 806.36. The
variance of the ICICI is 616.70 and ONGC is 1461.33. The standard deviation between the
companies is 24.83% for ICICI and 38.22% for ONGC.
In the combination the risk of the ICICI is less than the ONGC comparisons, therefore
investor can invest combined money or fund in ICICI where as the portfolio risk, combined risk
between two is 88.08% which is less than ICICI and ONGC. Portfolio returns between two
companies is 847.8%
6. Portfolio Risk and Return between ONGC AND RELIANCE

a =38.22; b =33.49; Wa=0.25; Wb =0.75; rab =0.74;
Xa=806.36; Xb=1328.87
p =
(38.22)2*(0.25)2+ (33.49)2*(0.75)2+2(0.74) (38.22)

(33.49)(0.25)(0.75)
1075.3
= 32.79
Return = (806.36*0.25) + (1328.87*0.75)
= 1198.24
CONCLUSUION OF ONGC AND RELIANCE

As per the calculation the ONGC bears a proportion of 0.25 and where as RELIANCE bears
a proportion of 0.75. The expected returns of the ONGC are 806.36 and RELIANCE is 1328.87.
The variance of the ONGC is 1461.33 and RELIANCE is 1121.73. The standard deviation between
the companies is 38.22% for ONGC and 33.49% for RELIANCE.
In the combination the risk of the ONGC is less than the RELIANCE comparisons, therefore
investor can invest combined money or fund in ONGC where as the portfolio risk, combined risk
between two is 32.79% which is less than ONGC and RELIANCE. Portfolio returns between two
7. Portfolio Risk and Return between RELIANCE AND SBI

a =33.49; b =42.96; Wa=0.76; Wb =0.24; rab =0.56;
Xa=1328.87; Xb=983.06
p =
(33.49)2*(0.76)2+ (42.96)2*(0.24)2+2(0.56) (33.49)

(42.96)(0.76)(0.24)
1025.5
= 32.02
Return = (1328.87*0.76) + (983.06*0.24)
= 1245.8
CONCLUSUION OF RELIANCE AND SBI

As per the calculation the RELIANCE bears a proportion of 0.76 and where as SBI bears a
proportion of 0.24. The expected returns of the RELIANCE are 1328.87 and SBI is 983.06. The
variance of the RELIANCE is 1121.73 and SBI is 1846.177. The standard deviation between the
companies is 33.49% for RELIANCE and 42.96% for SBI.
In the combination the risk of the RELIANCE is less than the SBI comparisons, therefore
investor can invest combined money or fund in RELIANCE where as the portfolio risk, combined
risk between two is 32.02% which is less than RELIANCE and SBI. Portfolio returns between two
8. Portfolio Risk and Return between SBI AND TATAMOTORS

a =42.96; b =23.80; Wa=0.08; Wb =0.92; rab =0.44;
Xa=983.06; Xb=756.8
p =
(42.96)2*(0.08)2+ (23.80)2*(0.92)2+2(0.44) (42.96)

(23.80)(0.08)(0.92)
559.5
= 23.65
Return = (983.06*0.08) + (756.87*0.92)
= 774.96
CONCLUSUION OF SBI AND TATAMOTORS

As per the calculation the SBI bears a proportion of 0.08 and where as TATAMOTORS
bears a proportion of 0.92. The expected returns of the SBI are 983.06 and TATAMOTORS is
756.87. The variance of the SBI is 1846.177 and TATAMOTORS is 566.67. The standard deviation
between the companies is 42.96% for SBI and 23.80% for TATAMOTORS.
In the combination the risk of the SBI is less than the TATAMOTORS comparisons,
therefore investor can invest combined money or fund in SBI where as the portfolio risk,
combined risk between two is 23.65% which is less than SBI and TATAMOTORS. Portfolio
returns between two companies is 774.96%
9. Portfolio Risk and Return between TATA MOTORS AND WIPRO

a =23.80; b =14.91; Wa= -0.01; Wb =1.01; rab =0.64;
Xa=756.87; Xb=572.13
p =
(23.80)2*(-0.01)2+ (14.91)2*(1.01)2+2(0.64) (23.80)

(14.91)(-0.01)(1.01)
788.61 = 28.08
Return = (756.87*-0.01) + (572.13*1.01)
= 570.29
CONCLUSUION OF TATA MOTORS AND WIPRO

As per the calculation the TATA MOTORS bears a proportion of -0.01 and where as WIPRO
bears a proportion of 1.01. The expected returns of the TATA MOTORS are 756.87 and WIPRO is
572.13. The variance of the TATA MOTORS is 566.67 and WIPRO is 222.46. The standard
deviation between the companies is 23.26% for TATA MOTORS and 14.91% for WIPRO.
In the combination the risk of the WIPRO is less than the TATA MOTORS comparisons,
therefore investor can invest combined money or fund in WIPRO where as the portfolio risk,
combined risk between two is 28.08% which is less than TATA MOTORS and WIPRO. Portfolio
returns between two companies is 570.29%.
PORTFOLIO RISK AND RETURNS

PORTFOLIO
RISK
RETURNS
BHEL & HDFC
26.03
775.7
HDFC & BHARATI TELEVENTURES
15.77
718.80
BHARATI TELEVENTURES & ITC
9.59
260.8
ITC & ICICI
9.46
256.77
ICICI & ONGC
88.08
847.8
ONGC & RELIANCE
32.79
1198.24
RELIANCE & SBI
32.02
1245.8
SBI & TATAMOTORS
23.65
774.96
TATAMOTORS & WIPRO
28.08
570.29
INTERPRETATION
The above table explains you about portfolio risk and return. Every company is related
with risk and return. If we watch these companies risk and returns, here RELIANCE and SBI
company has 32.02 risk but with high returns 1245.8. In the same way if compare ICICI and
ONGC has 88.08 risks with less return of 847.8, as a result it has more risk with less return. If we
watch another company as ITC and ICICI 9.46 risk with 256.77 returns. The middle class investor
wants low risk with high return. Because he cannot take more risk so here more investors can
prefer to ITC and ICICI Company with low risk. This portfolio risk and return table is helpful to
the investors to choose which company is better to them and how much it may be security to
their investment money.

Data Analysis and Investment

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DATA ANALYSIS AND INVESTMENT

PURPOSE OF THE STUDY

Variance = 1/n-1 * (Xi-X)]

(dXdY) =Summation of product of deviation between two companies.

COVab = Co-Variance between A & B

(b)2 rab (a)( b)

1. Calculation of standard deviation of BHEL Company

= (TOTAL RETURN)/NO OF DAYS

2. Calculation of standard deviation of HDFC Company

= (TOTAL RETURN)/NO OF DAYS

3. Calculation of standard deviation of BHARATI TELEVENTURES Company

= (TOTAL RETURN)/NO OF DAYS

4. Calculation of standard deviation of ITC LTD Company

= (TOTAL RETURN)/NO OF DAYS

5. Calculation of standard deviation of ICICI LTD Company

= (TOTAL RETURN)/NO OF DAYS

6. Calculation of standard deviation of ONGC Company

= (TOTAL RETURN)/NO OF DAYS

7. Calculation of standard deviation of RELIANCE Company

= (TOTAL RETURN)/NO OF DAYS

8. Calculation of standard deviation of STATE BANK Company

= (TOTAL RETURN)/NO OF DAYS

9. Calculation of standard deviation of TATAMOTORS Company

= (TOTAL RETURN)/NO OF DAYS

10. Calculation of standard deviation of WIPRO Company

= (TOTAL RETURN)/NO OF DAYS

1. Correlation between BHEL and HDFC

2. Correlation between HDFC & BHARATI TELEVENTURES LTD

3. Correlation between BHARATI TELEVENTURES and ITC LTD

Correlation between ITC & ICICI LTD

ITC Deviation of ICICI

5. Correlation between ICICI and ONGC LTD

Deviation of ONGC Production

6. Correlation between ONGC & RELIANCELTD

Deviation of ONGC Deviation

7. Correlation between RELIANCE and SBI LTD

8. Correlation between SBI & TATAMOTORS LTD

Deviation of TATA Production

9. Correlation between TATA MOTORS and WIPRO

Deviation of TATA Deviation of WIPRO Production

Correlation Coefficient rab = COV (ab)

Calculation of Portfolio Weight

Xa is proportion of 1st security

1. Portfolio Weight BHEL AND HDFC

3. Portfolio Weight BHARATI TELEVENTURES AND ITC

5. Portfolio Weight ICICI AND ONGC

7. Portfolio Weight RELIANCE AND SBI

9. Portfolio Weight TATAMOTOR AND WIPRO

a2*Wa2 + b2*Wb2 + 2rab*a*b*WA*Wb

Where, p = Portfolio risk

Xb= Average return of 2nd security

1. Portfolio Risk and Return between BHEL AND HDFC

(103.34)2*(-0.15)2+ (29.48)2*(1.15)2+2(0.65) (103.34)

(29.48) (-0.15) (1.15)

Return = (2130.72*-0.15) + (952.43*1.15)

CONCLUSUION OF BHEL AND HDFC

2. Portfolio Risk and Return between HDFC AND BHARATI TELEVENTURES

(29.48)2*(0.17)2+ (16.56)2*(0.82)2+2(0.25) (29.48) (16.56)

Return = (952.43*0.17) + (670.95*0.83)

CONCLUSUION OF HDFC AND BHARATI TELEVENTURES

3. Portfolio Risk and Return between BHARATI TELEVENTURES AND ITC

(16.56)2*(0.21)2+ (10.32)2*(0.79)2+2(0.26) (16.56) (10.32)

Return = (670.95* 0.21) + (151.91* 0.79)

a2Wa2 + b2Wb2 + 2rababWAWb

(103.34)2(-0.15)2+ (29.48)2(1.15)2+2(0.65) (103.34)

Return = (2130.72-0.15) + (952.431.15)

(29.48)2(0.17)2+ (16.56)2(0.82)2+2(0.25) (29.48) (16.56)

Return = (952.430.17) + (670.950.83)

(16.56)2(0.21)2+ (10.32)2(0.79)2+2(0.26) (16.56) (10.32)

Return = (151.910.85) + (851.030.15)

(24.83)2(0.93)2+ (38.22)2(0.07)2+2(0.58) (24.83)

Return = (851.030.93) + (806.360.07)

(38.22)2(0.25)2+ (33.49)2(0.75)2+2(0.74) (38.22)

Return = (806.360.25) + (1328.870.75)

(33.49)2(0.76)2+ (42.96)2(0.24)2+2(0.56) (33.49)

Return = (1328.870.76) + (983.060.24)

(42.96)2(0.08)2+ (23.80)2(0.92)2+2(0.44) (42.96)

Return = (983.060.08) + (756.870.92)

(23.80)2(-0.01)2+ (14.91)2(1.01)2+2(0.64) (23.80)

Return = (756.87-0.01) + (572.131.01)