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An analysis of 15 FMCG Companies under nifty has been done in this report.
Those companies are
1)BRITANIA
2)COLGATE PALMOLIVE
4)EMAMI LTD
9)ITC LTD
11)MARICO LTD
We have taken the opening and closing prices of all the industries to calculate
the expected return, variance, covariance .Expected return is nothing but the
the amount of profit or loss an investor anticipates on an investment that has
various known or expected rates of return.The expected return in this case, is
the difference between the closing price and the opening price divided by the
opening price .Since, we have taken all the months from 2014 to august 2017,
we will multiply the expected return with 12 and get the final expected return.
We can see that all the companies are showing positive as well as negative
expected returns . Companies like United Brewiers ltd ,United Spirit ltd, Marico
Ltd all are having positive as well as negative returns. They are not following
any trend .It is sometimes positive and sometimes negative.
So, we will copy the matrix again at the bottom of it. We know that variance –
covariance matrix is symmetric and hence, we will put all the values according
to that and complete the table .We will get the values of all the stocks.
We don’t have the weights and the standard deviation. Efficient frontier will
help in finding it.
Efficient frontier is the set of optimal portfolios that offers the highest
expected returns for a defined level of risk for a given level of expected return.
Portfolios that lie below the efficient frontier are sub-optimal , because they
do not provide enough return for the level of risk.
We will