Help regarding analysis of equities for the past 3 yrs

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 think you could even add another coloumn of comparing a stock with its peers

Dear rashmi. I am a cost accountant by profession , i studied your method its perfect,normally one year is long period,in stock market , decision are taken on quaterly basis results, by mutual funds/fii,second, pe concept is used, you have to incorporate that concept in your studies,third give indivisual performance of four pillers of stock market from four sectors,metal/tisco auto/tata motor oil&gas/ reliance finnaly banking sbi.furthur you can discuss any thing from me regarding your views.you can go through my thread thanks

Give name of six stock which you selected if these four are part of that,IN MY THREAD I HAVE GIVEN THREE CASES ON COPPER YOU HAVE TO GIVE CASES LIKE THIS ON INVESTMENT IN YOUR SIX STOCKS GO THROUGH MY THREAD FOR DETAIL OF CASES IN COPPER

I have chosen top six stocks based on mkt capitalisation from six different sectors like auto,oil & gas,banking,IT,Power,metal & reality..

please give names of those six stocks from six sectors you chossen