A STUDY ON RETURN & RISK MEASUREMENT W.R.T EQUITY STOCKS

Abstract

The measurement of risk and return associated with equity stocks constitutes one of the most fundamental analytical frameworks in modern investment management and portfolio theory. Equity markets, characterised by their inherent price volatility, cyclical behaviour, and sensitivity tomacroeconomic variables, present investors with a spectrum of risk-adjusted return opportunities that demand rigorous quantitative assessment. This study examines the risk-return profile of selected equity stocks listed on the National Stock Exchange (NSE) of India, focusing on five blue-chip companies across diverse sectors over a five-year period from FY 2019–20 to FY 2023–24. Using standard deviation as a measure of total risk, beta coefficient to quantify systematic market risk, average return computation, and the Sharpe ratio forrisk-adjusted performance assessment, the study provides aequity investment opportunities. Secondary data sourced from NSE historical price archives and company annual reports was analysed through quantitative financial tools. Findings reveal significant inter-sectoral variation in riskreturn characteristics, with pharmaceutical and IT sector stocks delivering superior Sharpe ratios relative to capital-intensive manufacturing counterparts. The study offers actionable investment guidance for retail and institutional investors navigating India's equity market landscape.