Security Analysis Of Selective Stocks From FMCG, IT and Banking Sectors

The stock market is a massive area to explore securities to invest in and security analysis is a very crucial part. In order to achieve the desired returns from the investments, security analysis helps an investor to understand the market conditions and stock prices in the market by gathering historical data to forecast the future prices. Main itinerary of the following study is to find the suitable securities which can be considered for making the portfolio. Methods like Markowitz portfolio theory, Sharpe single index model and CAPM are used to determine the returns based on the risk associated with individual stock, the securities are then ranked based on their optimal proportions which are calculated from the above-mentioned methods. For the analysis, five stocks were chosen from each sector during the period of 1st January 2015 to 28th February 2020 to conduct the analysis. All the 15 stocks are put together for analysis to shortlist few stocks which are lucrative. The formulae from the Markowitz portfolio theory, Sharpe index model and CAPM are bit too complex to calculate manually, therefore it was simplified and calculated in the Excel while following exact procedure stated by these methods. The results of the analysis show how each sector is doing in the market with respective to the market index BSE Sensex and conclusive statements have been made based on the assimilated results. According to the analysis, FMCG sector has been doing well compared to the IT and banking sectors. This is due the underlying market conditions and performance of the stocks in those sectors are comparatively less to the market index.