Portfolio Management

Submitted to:
Dr.Kiran
Submitted by:
Gautam Sharma
Geetika Sharma
Himashu
Maninder
Investment Objective
Maximize the expected rate of return, subject to
risk exposure being held within a certain limit.
Selection of Asset Mix
• Cash
• Stocks

Formulation of Portfolio Strategy

• Active Portfolio Strategy
Market Timings: Highly Active
Sector Rotation: Active
Selection of Securities
• Equity Shares:-

Reliance Industries
LIC Housing Finance
Vijaya Bank
Jaypee Associates
Vijaya Bank
Date of purchase: 17th August
Number of Shares: 200
Purchase Price: Rs.79
Date of Sale: 13th October
Sale Price: Rs.94.5
Reason of Purchase: PSU
Rate of Return: (94.5-79)/79*100
=19.62%
Technical
Buy Signal: Stock Price Line
above MA line falls but begin
to rise again before reaching
MA line
Risk:-
Period Return% (R- Ŕ) (R- Ŕ) ²
Aug 9.58% -4.43 19.624
Sept 1.36% -12.65 160.02
Oct 31.10% 10.94 119.683
42.04 6.14 299.33

Ŕ= ∑R/n= 42.04/3= 14.01%

б = {∑ (R- Ŕ) ²/n}½= 9.98%
β = ∑ (R- Ŕ) ∑(Rm- Ŕm)/ ∑(Rm- Ŕm ) ²
=6.14*0.001/89.76=0
Jaypee Associates
Date of Purchase: 27th August
Number of shares: 200
Purchase Price: Rs.113.4
Date of Sale: 5th October
Sale Price: Rs.128
Reason of Purchase: Capital good company
Dividend : 27% on 15 Sept
Rate of Return: (128+2.7- 113.4/113.4)*100
= 15.25%
Technical
Buy Signal: August
Stock Price Line rises
through the MA Line
when the Graph of
MA Line is flattening
Sell Signal: October
Stock Price Line rises above
MA Line which is falling
Risk:-
Period Return% (R- Ŕ) (R- Ŕ) ²
Aug -8.02% -7.597 57.71
Sept 9.77% 10.193 103.89
Oct -3.02% -2.597 6.744
-1.27 -0.001 168.34

Ŕ= ∑R/n=-1.27/3= -0.423
б = {∑ (R- Ŕ) ²/n}½= 7.491
β = ∑(R- Ŕ) ∑(Rm- Ŕm)/ ∑(Rm- Ŕm ) ² =0
Reliance Industries
Date of Purchase: 31st August
Number of shares: 25
Purchase Price: Rs. 934(52 weeks low)
Date of Sale: 11th October
Sale Price: Rs.1058
Reason of Purchase: Petroleum Deregulations
Rate of Return: (1058-934)/934*100
=13.27%
Technical
Stock price line falls
below the MA Line
which is rising
Risk:-
Period Return% (R- Ŕ) (R- Ŕ) ²
Aug -9.92% -11.34% 128.7%
Sept 5.32% 3.895% 15.17%
Oct 8.87% 7.445% 55.43%
4.28% 0 199.3%

Ŕ= ∑R/n= 4.28/3= 1.425

б = {∑ (R- Ŕ) ²/n}½= 8.15
β = ∑(R- Ŕ) ∑(Rm- Ŕm)/ ∑(Rm- Ŕm ) ² =0
LIC Housing Finance
Date of Purchase: 6th September
Number of shares: 30
Purchase Price: Rs. 1216
Date of Sale: 7th October
Sale Price: Rs.1472
Reason of Purchase: Strong Brand name
High Profitability
NBFC Banking license soon
Rate of Return: (1472-1216)/1216*100
=21.05%
Technical
Stock Price Line is
above MA line which
is falling and rises
before touching
MA Line
Risk:-
Period Return% (R- Ŕ) (R- Ŕ) ²
Aug 5.37% -0.11 0.0121
Sept 18.74% 13.26 175.827
Oct -7.67% -13.15 172.92
16.44 0 348.75

Ŕ= ∑R/n= 16.44/3= 5.48

б = {∑ (R- Ŕ) ²/n}½= 0
β = ∑(R- Ŕ) ∑(Rm- Ŕm)/ ∑(Rm- Ŕm ) ² =0
Portfolio Return
Weight% Return% WR
Reliance 23.75 13.27 3.15
LIC 37.1 21.05 7.81
Vijaya bank 16.07 19.62 3.15
JayPee 23.06 15.25 3.51

Portfolio Return = ∑WR= 17.62%

Portfolio Risk
б²=w1² б1²+ w2²б2²+ w3²б3²+ w4²б4²
2w1w2cov12 +2w1w3cov13+ 2w1w4cov14+
2w2w3cov23+ 2w2w4cov24+ 2w3w4cov34

=25720.7+29839.7+37464.86+0+
2(1682.4-14640.57+301812.8+
35237.4+428070.9-10295.11)/10000=157.67

б= 12.57
Sensex Return

2nd August: 18081

11th October: 20340
Return: 20340-18081/18081*100= 12.49%
Our Portfolio Return is 17.62% which
outperformed the Sensex.