The Risk in Investing
Company: Larsen & Toubro Ltd; Peer Company: GMR Infrastructures;
Month
Adjusted Closing Price(L&T)
L&Ts Rate of Return (%)
Adjusted Closing Price(GMR)
GMRs Rate of Return (%)
Apr-10
1608.35
May-10
1628.6
1.25905431
-10.66066066
Jun-10
1804.55
10.80375783
Jul-10
1797.1
-0.41284531
56.95
-4.285714286
Aug-10
1812.45
0.854153915
55.65
-2.282704126
Sep-10
2044.7
12.8141466
56.65
1.796945193
Oct-10
2021.85
-1.11752335
-5.736981465
Nov-10
1949.85
-3.56109504
-14.23220974
Dec-10
1979.05
1.497551094
45.85
0.109170306
Jan-11
1641.15
-17.0738486
39.35
-14.17666303
Feb-11
1528.05
-6.891509
41.15
4.57433291
Mar-11
1653.25
8.193449167
-1.093560146
Apr-11
1597.9
-3.34795101
-7.371007371
May-11
2.885036611
35.65
-5.437665782
Jun-11
1822.65
10.86678832
32.65
-8.415147265
Jul-11
1725.95
-5.30546183
30.65
-6.125574273
Aug-11
1609.8
-6.72962716
-11.908646
Sep-11
1358.2
-15.6292707
Oct-11
1413.25
4.053158592
2.592592593
Nov-11
1268.8
-10.2211215
20.45
-26.1732852
Dec-11
995.1
-21.5715637
2.689486553
Jan-12
1310.6
31.70535625
39.52380952
Feb-12
1308.1
-0.19075233
28.55
-2.559726962
Mar-12
1306.85
-0.09555844
8.581436077
Average Monthly Return
-0.313725
-2.63442492
Annual Return
-3.700415
-27.41193829
11.180941
11.89878683
While the Average Daily rate of return for the year FY 2011-2012 being -0.06991339% And the Average Weekly return for the year FY 2011-2012 being -0.32502749%.
Observations:
The risk in investing both L&T and GMR are more or less the same, while the negative return is high for GMR making L&T as the better stock than GMR.
Based on the above results we can assume that the growth in the industry is less for the given period i.e. FY2010-2012
Portfolio Company: Disa India Ltd
Minimum Variance Portfolio
0.411270637
CORREL
0.088605777
Table 2: Portfolio comparison Return
Portfolio
Percentage of L&T
Percentage of Disa India
Return of L&T
Return of Disa India
Portfolio Return
-3.700415253
53.14972291
47.46470909
-3.700415253
53.14972291
41.77969527
-3.700415253
53.14972291
36.09468146
-3.700415253
53.14972291
30.40966764
-3.700415253
53.14972291
24.72465383
-3.700415253
53.14972291
19.03964001
-3.700415253
53.14972291
13.35462619
-3.700415253
53.14972291
7.669612379
-3.700415253
53.14972291
1.984598563
-3.700415253
53.14972291
38.93718837
Min.