Introduction

In this assignment we discussing about Share market, Bombay stock exchange

(BSE) Sensex, and Analysing BSE Sensex and two shares. Now, firstly introduce
to the share market, also known as the stock market or equity market, is a critical
pillar of the global financial system. It provides a platform for buying and selling
shares or ownership stakes in publicly listed companies. The share market plays
a crucial role in mobilizing capital, facilitating investment, and driving economic
growth. Investors participate in the share market with the expectation of earning
returns through dividends and capital appreciation. In the share market,
companies can raise capital by issuing shares to the public through initial public
offerings (IPOs) or follow-on public offers (FPOs). By purchasing these shares,
investors become partial owners of the company and are entitled to a share in the
company's profits and assets. As the company grows and becomes more
profitable, the value of its shares can increase, resulting in capital gains for the
shareholders. The Bombay Stock Exchange (BSE) Sensex is a significant stock
market index in India, representing the performance of 30 large and financially
sound companies listed on the BSE. It was launched on January 1, 1986, with a
base value of 100 points. The Sensex serves as a barometer of the Indian stock
market, reflecting its overall health and direction. The share market is a dynamic
and essential component of the financial system, providing a mechanism for
companies to raise capital and investors to participate in wealth creation. The BSE
Sensex, as India's flagship stock market index, plays a pivotal role in reflecting
the market's overall sentiment and performance, guiding investment strategies
and shaping the economic landscape of the country.
 OBJECTIVES

 The capital market and share market are to facilitate the efficient
allocation of financial resources, foster economic growth, and
provide avenues for investors and companies to raise capital.

Analyzing the BSE Sensex and equity shares is to gain insights into
the overall performance of the stock market and specific companies.
This analysis helps investors, traders, financial institutions, and
policymakers make informed decisions based on market trends and
individual stock movements.

We will be discussing share market strategy and its importance in

the Indian Stock market. As you all know, stock market can be a
complex and volatile environment, but with the right strategy and
knowledge one can navigate it successfully. We will be analyzing
the BSE and Sensex index, as well as their daily, monthly, and yearly
returns. We also be discussing risk analysis associated with three
returns.
 METHODOLOGY AND DATA SOURCE

I have taken two shares “TATA CONSULTANCY SERVICES

LTD.” and “LIC HOUSING FINANCE LTD.” I have calculated
Risk and Return using the formulas
𝑝𝑡+1 −𝑃𝑡
Return =
𝑃𝑡

Here, 𝑝𝑡+1 = The closing price of the future time period

𝑝𝑡 = The closing price of the current time period
Further, for calculating Risk firstly I calculated the Mean by using the
formula:
Sum of observations/ total no. of observations
After that I have calculated Risk(SD) by using the formula:

Risk=
Lastly, I have calculated the Correlation between two Equity shares
and BSE Sensex by using the Formula:
Correlation =CORREL(arrey1, arrey2)
I have collected the data of shares from:
https://www.bseindia.com/markets/equity/EQReports/StockPrcHistori
.aspx?flag=0&type=ETF
https://www.bseindia.com/Indices/IndexArchiveData.html
 ANAYLSIS OF
TWO EQUITY SHARES
(MONTHLY BASIS)

1) TATA CONSULTANCY SERVICES LTD.

2) LIC HOUSING FINANCE LTD.

There is a zero Correlation between “TATA CONSULTANCY

SERVICES LTD.” and “LIC HOUSING FINANCE LTD.”

It suggests that the correlation statistics does not indicate a relationship

between the two variables. This does not mean that there is no
relationship at all; it simply means that there is not a linear relationship.
A zero correlation is often indicated using the abbreviation r = 0.

In between two shares the Risk of the first equity share “TATA
CONSULTANCY SERVICES LTD.” is tend to be increasing initially,
over time it starts declining at constant rate and then remains constant
for long time lastly it starts rising.

Where the second equity share “LIC HOUSING FINANCE LTD.”

tend to be increasing initially after that it starts declining at decreasing
rate, after that its remains constant till the end.
ANAYLSIS BETWEEN 1ST EQUITY SHARES AND BSE
SENSEX:

EQUITY SHARE: “TATA CONSULTANCY SERVICES LTD.”

AND “S&P BSE SENSEX”

There is a negative correlation between 1st equity share “TATA

CONSULTANCY SERVICES LTD.” and “S&P BSE SENSEX” both
moving in the opposite direction. As one variable increases in value,
the other decreases. This relationship is measured by the correlation
coefficient, and the concept of negative correlation is central to
portfolio diversification theory.

Risk of the first equity share “TATA CONSULTANCY SERVICES

LTD.” is tend to be increasing initially, over time it starts declining at
constant rate and then remains constant for long time lastly it starts
rising.

Risk of the “S&P BSE SENSEX” initially its tend to be increasing at

constant rate after that it increasing at decreasing rate then its starts
rising constantly basically it fluctuates constantly over a period of
time.
ANAYLSIS BETWEEN 2nd EQUITY SHARES AND BSE
SENSEX:

EQUITY SHARE: “LIC HOUSING FINANCE LTD.”

AND “S&P BSE SENSEX”

There is a negative correlation between 2nd equity share “LIC

HOUSING FINANCE LTD.” and “S&P BSE SENSEX” both
moving in the opposite direction. As one variable increases in
value, the other decreases. This relationship is measured by
the correlation coefficient, and the concept of negative
correlation is central to portfolio diversification theory.

Where the second equity share “LIC HOUSING FINANCE

LTD.” tend to be increasing initially after that it starts
declining at decreasing rate, after that its remains constant till
the end.

Risk of the “S&P BSE SENSEX” initially its tend to be

increasing at constant rate after that it increasing at decreasing
rate then its starts rising constantly basically it fluctuates
constantly over a period of time.
 CONCLUSION
In conclusion, the share market strategy involves careful consideration
of various factors to make informed investment decisions. Two critical
aspects in this strategy are individual stock selection and the broader
market representation through indices like S&P BSE SENSEX.
Individual stock selection requires conducting thorough research and
analysis of companies, including their financial health, growth
prospects, competitive positioning, and industry outlook. Stocks, such
as “TATA CONSULTANCY SERVICES LTD.” and, “LIC
HOUSING FINANCE LTD.” carry specific risks associated with their
respective industries and overall market conditions.
Indices like BSE SENSEX represent the overall performance of a
basket of stocks and can serve as a benchmark for market movements.
Investing in an index can help spread risk as it diversifies across
multiple companies, potentially reducing volatility compared to
investing in individual stocks.
Correlation plays a role in identifying relationships between assets.
Positive correlation indicates that two assets tend to move in the same
direction, while negative correlation suggests they move in opposite
directions. However, it is essential to remember that correlation is not
a guarantee of future performance.
Ultimately, successful share market strategies require a blend of
fundamental research, risk assessment, diversification, and a long-term
perspective. It is essential to consider individual risk tolerance,
investment goals, and seek professional advice if needed. Careful
analysis and prudent decision-making are vital to navigate the
complexities of the stock market and work towards achieving financial
objectives.
REFERANCE:
1. Wikipedia
2. https://www.bseindia.com/markets/equity/EQReports/StockPrc
Histori.aspx?flag=0&type=ETF
3.https://www.bseindia.com/Indices/IndexArchiveData.html
4. Guide to Indian Stock Market, Gala J.
5. Share Market Dictionary , A. Sulthan