A Study on Risk and Return Analysis of Selected Stocks at the Seven Pounds

Mrs. Anisha J1, Anbumani M2

1Mrs. Anisha J Assistant Professor, Master of Business Administration & Panimalar Engineering College, Chennai-600123

2Anbumani M, Student, Master of Business Administration & Panimalar Engineering College, Chennai -600123

Abstract: The goal of this study is to utilize Python to create and assess an ideal investing portfolio using Harry Markowitz's Modern Portfolio Theory (MPT). The primary goal is to determine a portfolio that maximizes returns while reducing risk through diversification by analysing the link between risk and return. The study makes use of historical stock price information from businesses in several industries that are listed on the National Stock Exchange (NSE). Portfolio performance was evaluated using statistical metrics such variance-covariance matrix, standard deviation, anticipated return, and Sharpe ratio. The findings demonstrate that adding a risk-free asset, such as Government of India assets, increases portfolio stability while diversity lowers risk. All things considered, the ideal portfolio offers managed risk and balanced returns, making it appropriate for investors who are somewhat risk adverse.Key Words: Modern Portfolio Theory (MPT), Portfolio Optimization, Risk–Return Analysis, Diversification, Efficient Frontier, Sharpe Ratio, Python in Finance, NSE, Risk-Free Asset, Financial Modelling.