Report on BPCL stock analysis
Historical returns and Risk
BPCL
Month Open Price Close Price Return Return % X-X* (X-X*)2
Jun-11 628.1 650.25 22.15 3.5265085 2.223810606 4.945334
Jul-11 650.25 657.85 7.6 1.1687812 -0.133916674 0.017934
Aug-11 657.85 674.6 16.75 2.5461731 1.243475228 1.546231
Sep-11 674.6 647.8 -26.8 -3.9727246 -5.275422489 27.83008
Oct-11 647.8 622.6 -25.2 -3.8900895 -5.192787446 26.96504
Nov-11 622.6 537.95 -84.65 -13.596209 -14.89890736 221.9774
Dec-11 537.95 477.8 -60.15 -11.181337 -12.48403447 155.8511
Jan-12 477.8 572.15 94.35 19.746756 18.44405805 340.1833
Feb-12 572.15 662.25 90.1 15.747619 14.44492072 208.6557
Mar-12 662.25 700.25 38 5.7380143 4.435316433 19.67203
Apr-12 700.25 670.65 -29.6 -4.2270618 -5.529759675 30.57824
May-12 670.65 697.65 27 4.025945 2.723247067 7.416075
Monthly Average
AVG Returns 1.3026979 1045.639
Standard Deviation 9.749771743
AVERAGE MONTHLY RETURNS OF THE COMPANY IS : (∑ MONTHLY RETURNS / 12)
Monthly Returns=15.632
Average Monthly Returns= 15.632/12 =1.3026979
Standard Deviation:
SD=Sqrt(1045.639/11) = ±9.749771743
Variance= 95.05805

Historical Returns and Risk of NSE
NSE
Month Open Price Close Price Return Return % X-X* (X-X*)2
Jun-11 5561.05 5674.4 113.35 2.038284137 2.857624 8.166016
Jul-11 5674.4 5482 -192.4 -3.390666855 -2.57133 6.611721
Aug-11 5482 5001 -481 -8.774170011 -7.95483 63.27932
Sep-11 5001 4943.25 -57.75 -1.154769046 -0.33543 0.112513
Oct-11 4943.25 5326.6 383.35 7.755019471 8.57436 73.51964
Nov-11 5326.6 4832.05 -494.55 -9.284534224 -8.46519 71.65951
Dec-11 4832.05 4624.3 -207.75 -4.299417432 -3.48008 12.11094
Jan-12 4624.3 5199.25 574.95 12.43323314 13.25257 175.6307
Feb-12 5199.25 5385.2 185.95 3.576477377 4.395817 19.32321
Mar-12 5385.2 5295.55 -89.65 -1.664747827 -0.84541 0.714714
Apr-12 5295.55 5248.15 -47.4 -0.895091161 -0.07575 0.005738
May-12 5248.15 4924.25 -323.9 -6.171698599 -5.35236 28.64774
Total -9.832081033
AVG Monthly Average Returns -0.819340086 459.7818
Variance 41.79834
Standard Deviation 6.465164
AVERAGE MONTHLY RETURNS OF THE COMPANY IS : (∑ MONTHLY RETURNS / 12)
Monthly Returns=-9.832
Average Monthly Returns= -9.832/12 = -0.81934
Standard Deviation:
SD=Sqrt(459.7818/11) = ±6.465164
Variance= 41.79834

Correlation Of Stock:
Correlation of BPCL and NSE
Month BPCL(X) x2 NSE(y) y2 Xy
Jun-11 3.526508518 12.43626233 2.038284137 4.154602223 7.188026371
Jul-11 1.168781238 1.366049582 -3.390666855 11.49662172 -3.962947804
Aug-11 2.54617314 6.482997658 -8.774170011 76.98605938 -22.34055601
Sep-11 -3.972724578 15.78254057 -1.154769046 1.33349155 4.587579371
Oct-11 -3.890089534 15.13279658 7.755019471 60.140327 -30.16772008
Nov-11 -13.59620944 184.8569113 -9.284534224 86.20257577 126.2344719
Dec-11 -11.18133656 125.0222872 -4.299417432 18.48499025 48.07323329
Jan-12 19.74675596 389.9343711 12.43323314 154.5852863 245.5160206
Feb-12 15.74761863 247.9874926 3.576477377 12.79119042 56.32100177
Mar-12 5.738014345 32.92480862 -1.664747827 2.771385329 -9.552346914
Apr-12 -4.227061764 17.86805115 -0.895091161 0.801188187 3.783605624
May-12 4.025944979 16.20823297 -6.171698599 38.08986359 -24.84691898
Total 15.63237494 1066.002802 -9.832081033 467.8375817 400.8334492
Summation
Square 244.3711463 96.66981743
Correlation Formula:
∑XY =400.8334492
∑X= 15.6323
∑Y= -9.8320
Correlation=0.596564811
COV(STOCK,MARKET) = CORR( STOCK,MARKET) * S.D(STOCK) * S.D (MARKET)
Cov(Stock,Market)=0.5965* 6.465164* 9.749771743 = 37.5997
Calculation of Beta:

Beta= 37.5997/41.79834 = 0.899648
Systematic Variance = β^2*Market Variance = 33.83017
TOTAL VARIANCE = SYSTAMATIC VAR + UNSYSTAMATIC VAR
95.05805 = 33.83017 + Unsystematic Variance
Unsystematic Variance= 61.22788%
Portfolio With Fixed Deposit:

 PORTFOLIO WITH TWO Assets
 ONE IS "FIXED DEPOSIT" ( i.e., standard deviation is " ZERO" )
 SECOND STOCK IS " BPCL" .
 INVESTMENT IN "FIXED DEPOSIT" IS 60% AND " BPCL " IS 40%
 AVERAGE MONTHLY RETURNS OF " FIXED DEPOSIT" : 0.7%
Portfolio of BPCL and FD
Month BPCL(X) x2 FD(Y) y2 xy
Jun-11 3.526508518 12.43626233 0.7 0.49 2.468556
Jul-11 1.168781238 1.366049582 0.7 0.49 0.818147
Aug-11 2.54617314 6.482997658 0.7 0.49 1.782321
Sep-11 -3.972724578 15.78254057 0.7 0.49 -2.78091
Oct-11 -3.890089534 15.13279658 0.7 0.49 -2.72306
Nov-11 -13.59620944 184.8569113 0.7 0.49 -9.51735
Dec-11 -11.18133656 125.0222872 0.7 0.49 -7.82694
Jan-12 19.74675596 389.9343711 0.7 0.49 13.82273
Feb-12 15.74761863 247.9874926 0.7 0.49 11.02333
Mar-12 5.738014345 32.92480862 0.7 0.49 4.01661
Apr-12 -4.227061764 17.86805115 0.7 0.49 -2.95894
May-12 4.025944979 16.20823297 0.7 0.49 2.818161
Total 15.63237494 1066.002802 8.4 5.88 10.94266
Summation
Square 244.3711463 70.56
Historical Return :
PORTFOLIO RETURNS (P r) = w1r1+w2r2
PORTFOLIO RETURNS = 0.60* 0.7 + 0.40*1.3026979
= 0.42+0.52107916
=0.941%

Portfolio Risk:
Portfolio Risk = Ws*Rs =0.4*9.749771743 =±3.899
• Correlation between FD and BPCL is zero as there is no change in returns of FD.
• So covariance is also zero.

Portfolio With 2 Stocks(BPCL,HUL):