A Study on Risk – Return Analysis of Selected IT Companies Listed in NSE

Abstract

The risk-return relationship is a fundamental concept in not only financial analysis, but in every aspect of life. If decisions are to lead to consider the combined influence on expected (future) return or benefit as well as on risk/cost. Return express the amount which an investor actually earned on an investment during a certain period. Return includes the interest, divided and capital gains; while risk represents the uncertainty associated with a particular task. The risk and return trade off says that the potential return rises with an increase in risk. It is important for an investor to decide on a balance between the desire for the lowest possible risk and highest possible return. This study reported a statistically significant positive relationship between risk and returns, both at the individual security level and at the portfolio level, confirming the theoretical predictions and empirical findings on this issue in developed markets.