EXPERIMENT: DASHBOARD PORTFOLIO

 Time Period of the experiment: 22nd December 2020 – 22th January

2021

 Benchmark used in the experiment: S&P BSE SENSEX

 Portfolio Composition: Axis Bank, Bharti Airtel, HCL Technology, Larsen

and Tourbo and Sun Pharmaceuticals

Table 1: Stocks used in the experiment

Sr No NAME OF THE STOCKS INDUSTRY
1 Axis Bank Financials
2 Bharti Airtel Telecommunications
3 HCL Technologies Information Technology
4 Larsen and Tourbo Infrastructure
5 Sun Pharmaceuticals Pharma

Table 2: Comparison of portfolio returns with that of the benchmark i.e. S&P
BSE Sensex
Effective Monthly Return
S&P BSE Sensex 8.70%
Portfolio 12.10%
 EFFECTIVE MONTHLY RETURNS

14.00%
12.00%
10.00%
8.00% 12.10%
6.00%
8.70%
4.00%
2.00%
0.00%
S&P BSE SENSEX PORTFOLIO

INTERPRETATION: The portfolio was able to give superior returns to that of

that of the benchmark. While portfolio gave an effective monthly return of
12.10%, the S&P BSE SENSEX gave returns of 8.70%. Thus, an alpha of 4.40%
was generated.

Table 3: Comparison of portfolio beta with that of the benchmark i.e. S&P BSE
Sensex
  Beta
S&P BSE Sensex 1
Portfolio 0.965
INTERPRETATION: The beta of the portfolio was 0.965 while that of the
benchmark is 1.

Table 4: Comparison of portfolio beta with that of the benchmark i.e. S&P BSE
Sensex.
  VARIANCE
S&P BSE Sensex 0.07%
Portfolio 0.04%
 VARIANCE

0.07%
0.06%
0.05% 0.07%
0.04%
0.03% 0.04%
0.02%
0.01%
0.00%
S&P BSE SENSEX PORTFOLIO

INTERPRETATION: The variance of the portfolio was 0.03% while that of the
benchmark was 0.07%. It highlights that the portfolio was less volatile and had
lower risk due to a well diversified portfolio.

Table 5: Comparison of portfolio beta with that of the benchmark i.e. S&P BSE
Sensex
  Standard Deviation
S&P BSE Sensex 2.69%
Portfolio 1.77%

INTERPRETATION: The standard deviation of the portfolio was 1.77% while that
of the benchmark was 2.69%. It again highlights that the portfolio was less
volatile and risk level is lower compared to the benchmark.

CONCLUSION:
The portfolio gave a superior return to that of the benchmark and delivered an
alpha of 4.10%. Also, the portfolio had lower variance and standard deviation
levels which showed that riskiness of the portfolio is lower compared to the
benchmark. The main reason which resulted in superior returns despite lower
variance level was that of the diversification benefit exploited in the portfolio
as it was comprised of stocks from different industries.