Hi everyone,
I am a student and making project on portfolio management.I am analysing the returns on stocks for the past three yrs sectors wise.
For that i have taken different sectors like Auto,Banking,IT etc.In each sector eg Auto I took the 6 top stocks according to market capitalisation and collected the data for each month from 2008 to 2009.Now i calculated the monthly return on each stock using
Return for Jan 2008 = (Close price on jan 2008-close price on Dec 2007)
I calculated this return for particular company for all months ie jan 08 to Dec 08. and then calculated the average return on that company stock for year 2008 by summing these values and dividing by 12.This way i have now average return on that company stock for year 2008
Similar thing i did using the BSE Auto indice values and calculate the average for 2008 year.
Now i am trying to compare the average return value for stock in 2008 to these indices average return for 2008 and if its greater that means stock is doing better than market .
This way i'll do for all sectors and compare which sector is doing well for the past three years.Can someone please tell me whether my method is correct or not.Any other view.suggestion please tell me.
Waiting for Reply..Its really urgent
Thanks a lot in advance
I am a student and making project on portfolio management.I am analysing the returns on stocks for the past three yrs sectors wise.
For that i have taken different sectors like Auto,Banking,IT etc.In each sector eg Auto I took the 6 top stocks according to market capitalisation and collected the data for each month from 2008 to 2009.Now i calculated the monthly return on each stock using
Return for Jan 2008 = (Close price on jan 2008-close price on Dec 2007)
I calculated this return for particular company for all months ie jan 08 to Dec 08. and then calculated the average return on that company stock for year 2008 by summing these values and dividing by 12.This way i have now average return on that company stock for year 2008
Similar thing i did using the BSE Auto indice values and calculate the average for 2008 year.
Now i am trying to compare the average return value for stock in 2008 to these indices average return for 2008 and if its greater that means stock is doing better than market .
This way i'll do for all sectors and compare which sector is doing well for the past three years.Can someone please tell me whether my method is correct or not.Any other view.suggestion please tell me.
Waiting for Reply..Its really urgent
Thanks a lot in advance