A Study on Portfolio Analysis and Investment Decisions with Reference to Pharmaceutical Sector in India
Keywords:
Mean, standard deviation, correlation, portfolio mean, portfolio standard deviation and optimum portfolioAbstract
The stock market is a platform which facilitates trading activities, and it is very volatile in nature. For
an investor it is very critical to understand the various factors like risk, return, correlation etc. which
influence their investment decisions. Portfolio analysis of stocks also plays a pivotal role. This study
focuses on portfolio analysis and investment decisions with respect to pharmaceutical sector in India.
From Nifty Pharma Index, top five pharmaceutical companies are selected and risk and return
analysis, correlation, portfolio analysis and optimum portfolios are done. Techniques like mean,
standard deviation, correlation, portfolio mean, portfolio standard deviation and optimum portfolio
formulas are used. From the study, it was found that Divi Labs and Cipla optimum portfolio mix gives
the highest return, whereas Sun Pharma and Cipla mix is having the highest risk. From the overall
study, it is suggested that investors as per their investment objectives should have risk, return and
portfolio analysis for making the best investment decisions.
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