Market Data

We are taking the 'KSE-100 Index' as proxy of market.

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

Rm - Rm' Rm - Rm' ^ 2
Rm
11347.66 -0.05612828 -0.18489 0.034184041
12022.46
0.28076728 0.152006 0.023105914
9386.92
0.60049514 0.471734 0.222533112
5865.01 -0.583366958 -0.71213 0.507126208
14077.16 0.402037747 0.273277 0.074680188
10040.5 0.050634064 -0.07813 0.006103816
9556.61 0.536827801 0.408067 0.166518526
6218.4
0.39064317 0.261882 0.068582278
4471.6 0.655283722 0.526523 0.277226192
2701.41 1.121981682 0.993221 0.986487351
1273.06 -0.155566169 -0.28433 0.080841931
1507.59
3.243609201 1.827238 2.447389556

Market Index
16000

14000
12000
10000
8000

Market Index

6000
4000
2000

0
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Market Return Trend

16000
14000
12000
10000
8000

Market Return

6000
4000
2000
0
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Market Index & Return Trend

16000
14000

12000
10000
8000

KSE 100 Index

6000

KSE 100 Index Return

4000
2000
0
-2000

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Mean Return
(Rm')=

0.128760986

This is the arithmetic average of daily returns of market of the past 5 years. We are using this mean as the
expected future returns from this security because this is the best estimate that we can make from
historical data.

Variance=

E(R - R') ^ 2 / n
= 0.489477911

Standard Deviation=
=

Risk Free Rate of Return (As

on short term T-Bills) =

Market Risk Premium

(Assumed)=

SQRT (Variance)
0.69962698

9.28%

3%

Hub Power

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

34.2
37.41
31.08
14.09
30.5
27.6
24
32.1
38.45
40.1
15.5
19.95

R - R'
(R - R')(Rm - Rm')
Return
R - R' ^ 2
-0.085805934 -0.26273
0.04857533 0.069025271
0.203667954 0.026747
0.004065755 0.000715417
1.20581973 1.028899
0.485366825 1.058633265
-0.538032787 -0.71495
0.509138339 0.511158453
0.105072464 -0.07185
-0.019634447 0.005162166
0.15 -0.02692
0.00210323 0.000724723
-0.252336449 -0.42926
-0.175165588 0.184261679
-0.165149545 -0.34207
-0.089582096 0.117012036
-0.041147132 -0.21807
-0.114817659 0.047553569
1.587096774 1.410176
1.400616086 1.988596629
-0.223057644 -0.39998
0.113724697 0.159982656

1.946127431

2.164390472 4.142825863

Share Price Trend

45

40
35
30
25

Share Price

20
15
10
5
0

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Return Trend
2
1.5
1
0.5

Return

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

-0.5
-1

Share Price & Return Trend

45
40
35
30
25

Share Price

20

Return

15
10
5

0
-5

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Mean Return
(R') =

0.176920676

This is the arithmetic average of daily returns from this security of the past 5 years. We are using this
mean as the expected future returns from this security because this is the best estimate that we can make
from historical data.

Variance=
=

E(R - R') ^ 2 / n
0.376620533

Standard Deviation=
SQRT (Variance)
= 0.613694169
This is the risk of the security.

Coefficient of
Variation=
Standard Deviation / Mean Return
= 3.468753254

This is the risk per unit of return of this security. An individual security among many securities is selected
on this basis. The lower the Coefficient of Variance is, the lower is the risk per unit of return.

Beta=
=

Cov-i,m / Var-m
0.401984984

The beta of this security is between 0 and 1. This meas that the risk of the security is less than the risk of
the market and the security movement is in the same direction as of the market.

Covariance
with market= E [ (Ri-Ri') * (Rm-Rm') ] / n
=
0.19676277

RRR using
CAPM=
=

Rf + (Rp)B
10.48%

The required rate of return is the same as the risk free rate of return. This is because the beta is 0.

Unilever

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

R - R'
(R - R')(Rm - Rm')
Return
R - R' ^ 2
5,565.80 0.276509861 0.059183
-0.01094224 0.003502588
4,360.17 0.895726087 0.678399
0.103120902 0.46022506
2,300.00 0.272327973 0.055001
0.025945747 0.003025086
1,807.71 -0.207162124 -0.42449
0.302290704 0.180191179
2,280.05
0.140025
-0.0773
-0.021124893 0.005975629
2,000.00 0.126760563 -0.09057
0.007075692 0.008202314
1,775.00 0.203389831 -0.01394
-0.005687375 0.00019425
1,475.00 0.018646409 -0.19868
-0.052030958 0.039474054
1,448.00 0.196694215 -0.02063
-0.010863732 0.00042572
1,210.00 0.592105263 0.374778
0.372237336 0.140458602
760 -0.124423963 -0.34175
0.097169134 0.116793852
868
2.390599115

0.807190317 0.958468335

Share Price Trend

6,000.00
5,000.00
4,000.00
3,000.00

Share Price"

2,000.00
1,000.00
0.00
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Return Trend
1
0.8
0.6
0.4
Return
0.2

0
-0.2

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

-0.4

Share Price & Return Trend

6,000.00
5,000.00

4,000.00
3,000.00

Share Price

2,000.00

Return

1,000.00
0.00
-1,000.00

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Mean Return
(R') =

0.217327192

This is the arithmetic average of daily returns from this security of the past 5 years. We are using this
mean as the expected future returns from this security because this is the best estimate that we can make
from historical data.

Variance=
=

E(R - R') ^ 2 / n
0.087133485

Standard Deviation=
SQRT (Variance)
= 0.295183816
This is the risk of the security.

Coefficient of
Variation=
Standard Deviation / Mean Return
=
1.35824612

This is the risk per unit of return of this security. An individual security among many securities is selected
on this basis. The lower the Coefficient of Variance is, the lower is the risk per unit of return.

Beta=
=

Cov-i,m / Var-m
0.149916751

The beta of this security is between 0 and 1. This meas that the risk of the security is less than the risk of
the market and the security movement is in the same direction as of the market.

Covariance
with market= E [ (Ri-Ri') * (Rm-Rm') ] / n
= 0.073380938
RRR using
CAPM=

Rf + (Rp)B
=
9.73%

The required rate of return is the same as the risk free rate of return. This is because the is 0.

Nestle Pakistan

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

R - R'
(R - R')(Rm - Rm')
Return
R - R' ^ 2
3,597.11 0.514661917 0.129585
-0.023958878 0.016792276
2,374.86 0.906048348 0.520971
0.079190939 0.271411246
1,245.96 -0.065646794 -0.45072
-0.212621762 0.203151852
1,333.50 -0.259166667 -0.64424
0.458783849 0.415049778
1,800.00
0.8 0.414923
0.11338884 0.172161176
1,000.00 0.298701299 -0.08638
0.00674826 0.007460745
770 0.480911626 0.095835
0.03910697 0.009184294
519.95 0.382845745 -0.00223
-0.000584301 4.97807E-06
376 0.720823799 0.335747
0.176778374 0.112725978
218.5 0.456666667 0.07159
0.071104434 0.005125094
150
0 -0.38508
0.10948782 0.148284222
150
4.235845939

-5.6E-16

0.817424545 1.361351638

Share Price Trend

4,000.00

3,500.00
3,000.00
2,500.00
2,000.00

Share Price

1,500.00
1,000.00
500.00

0.00
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Return Trend
1
0.8
0.6
0.4
Return
0.2

0
-0.2

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

-0.4

Share Price & Return Trend

4,000.00
3,500.00

3,000.00
2,500.00
2,000.00

Share Price

1,500.00

Return

1,000.00
500.00
0.00
-500.00

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Mean Return
(R') =

0.385076904

This is the arithmetic average of daily returns from this security of the past 5 years. We are using this
mean as the expected future returns from this security because this is the best estimate that we can make
from historical data.

Variance=
=

E(R - R') ^ 2 / n
0.12375924

Standard Deviation=
SQRT (Variance)
= 0.351794315
This is the risk of the security.

Coefficient of
Variation=
Standard Deviation / Mean Return
= 0.913568982

This is the risk per unit of return of this security. An individual security among many securities is selected
on this basis. The lower the Coefficient of Variance is, the lower is the risk per unit of return.

Beta=
=

Cov-i,m / Var-m
0.151817519

The beta of this security is between 0 and 1. This meas that the risk of the security is less than the risk of
the market and the security movement is in the same direction as of the market.

Covariance
with market= E [ (Ri-Ri') * (Rm-Rm') ] / n
= 0.074311322
RRR using
CAPM=
=

Rf + (Rp)B
9.73%

The required rate of return is the same as the risk free rate of return. This is because the is very near to 0.

Bata

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

R - R'
(R - R')(Rm - Rm')
Return
R - R' ^ 2
818.4
0.18754988
-0.3302
0.061050831 0.109033452
689.15 -0.296067416 -0.81382
-0.123705676 0.662302071
979 0.310575636 -0.20718
-0.097732175 0.042922053
747 0.538778453 0.021026
-0.014973512 0.000442111
485.45 2.595925926 2.078174
0.567916635 4.318806792
135
0.5 -0.01775
0.001386911 0.000315134
90 0.267605634 -0.25015
-0.102076438 0.062573213
71 0.392156863
-0.1256
-0.032891134 0.015774143
51 0.616481775 0.09873
0.051983462 0.009747565
31.55
0.37173913 -0.14601
-0.145023022 0.021319763
23 0.210526316 -0.30723
0.08735261 0.094387632
19
5.695272197

0.25328849 5.337623929

Share Price Trend

1200
1000
800
600

Share Price

400
200
0
2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Return Trend
3
2.5
2
1.5
Return
1

0.5
0
-0.5

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Share Price & Return Trend

1200

1000
800

600

Share Price

400

Return

200
0
-200

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Mean Return
(R') =

0.517752018

This is the arithmetic average of daily returns from this security of the past 5 years. We are using this
mean as the expected future returns from this security because this is the best estimate that we can make
from historical data.

Variance=
=

E(R - R') ^ 2 / n
0.485238539

Standard Deviation=
SQRT (Variance)
= 0.696590654
This is the risk of the security.

Coefficient of
Variation=
Standard Deviation / Mean Return
= 1.345413692

This is the risk per unit of return of this security. An individual security among many securities is selected
on this basis. The lower the Coefficient of Variance is, the lower is the risk per unit of return.

Beta=
=

Cov-i,m / Var-m
0.047042422

The beta of this security is between 0 and 1. This meas that the risk of the security is less than the risk of
the market and the security movement is in the same direction as of the market.

Covariance
with market= E [ (Ri-Ri') * (Rm-Rm') ] / n
= 0.023026226
RRR using
CAPM=
=

Rf + (Rp)B
9.42%

The required rate of return is the same as the risk free rate of return. This is because the is 0.

Rafhan Maize Products

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total

R - R'
(R - R')(Rm - Rm')
Return
R - R' ^ 2
2,513.28 0.191201354 -0.10207
0.018871684 0.010418325
2,109.87 0.420787879 0.127516
0.019383285 0.016260414
1,485.00 -0.376422471 -0.66969
-0.315917542 0.448490082
2,381.42 0.056062084 -0.23721
0.168923489 0.056268331
2,255.00 1.505555556 1.212284
0.331289047 1.469632509
900 0.285714286 -0.00756
0.000590426 5.71122E-05
700 0.129032258 -0.16424
-0.067020605 0.026974545
620
0.24 -0.05327
-0.01395087 0.002837858
500 0.612903226 0.319632
0.168293344 0.102164408
310 0.033333333 -0.25994
-0.258176017 0.067567877
300 0.127819549 -0.16545
0.047042497 0.027374365
266
3.225987053

0.099328737 2.228045826

Share Price Trend

4,000.00
3,500.00

3,000.00
2,500.00
2,000.00

Share Price

1,500.00
1,000.00
500.00
0.00

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Return Trend
2
1.5
1
Return
0.5
0
2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

-0.5

Share Price & Return Trend

3000
2500
2000

1500

Return

1000

Share Price

500
0
-500

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Mean Return
(R') =

0.29327155

This is the arithmetic average of daily returns from this security of the past 5 years. We are using this
mean as the expected future returns from this security because this is the best estimate that we can make
from historical data.

Variance=
=

E(R - R') ^ 2 / n
0.202549621

Standard Deviation=
SQRT (Variance)
= 0.450055131
This is the risk of the security.

Coefficient of
Variation=
Standard Deviation / Mean Return
= 1.534602078

This is the risk per unit of return of this security. An individual security among many securities is selected
on this basis. The lower the Coefficient of Variance is, the lower is the risk per unit of return.

Beta=
=

Cov-i,m / Var-m
0.018447993

The beta of this security is between 0 and 1. This meas that the risk of the security is less than the risk of
the market and the security movement is in the same direction as of the market.

Covariance
with market= E [ (Ri-Ri') * (Rm-Rm') ] / n
= 0.009029885
RRR using
CAPM=
=

Rf + (Rp)B
9.33%

The required rate of return is the same as the risk free rate of return. This is because the is 0.

Summary of Individual Securities

Mean Return
Hub Power
Unilever
Nestle
Bata
Rafhan Maize
Best Security

Standard Deviation

0.176920676
0.217327192
0.385076904
0.517752018
0.29327155
Bata

Coefficient of Variance

0.613694169
0.295183816
0.351794315
0.696590654
0.450055131
Unilever

Because it has Because it has the

the highest
lowest Standard
mean return Deviation

Beta

3.468753254
1.35824612
0.913568982
1.345413692
1.534602078
Nestle

RRR

0.401984984 10.48%
0.149916751 9.73%
0.151817519 9.73%
0.047042422 9.42%
0.018447993 9.33%
Rafhan Maize

Because it has
the lowest risk
Because it has the lowest as compared
Coefficient of Variation
to the market

4
3.5
3

2.5

Mean Return
Standard Deviation

Coefficient of Variance
Beta

1.5

RRR
1
0.5
0
Hub Power

Unilever

Nestle

Bata

Rafhan Maize

Portfolio 1: Hub Power & Unilever

Weight of Hub Power=
Weight of Unilever=

0.5
0.5

Expected Return (ER)=

(W1 * R1) + (W1 * R2)

=
19.71%

The portfolio return of Hub Power & Nestle is=

Variance=

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.505089445

Standard Deviation=
=

SQRT (Variance)
0.710696451

The risk of the portfolio as a whole is =

Covariance=
=

Total

19.71%

( R1 - R1' )
0

71.07%

E [ (R1-R1') * (R2-R2') ] / n
0.101300906

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

1.114309969

Correlation=
= Covariance / (SD 1 * SD 2)
0.559202097
The correlation of Hub Power & Unilever is approximately 0.6. This means that these two securities are
moderately correlated, they move moderately in the same direction.

Portfolio 2: Hub Power & Nestle

Weight of Hub Power=
Weight of Nestle=

0.5
0.5

Expected Return (ER)=

(W1 * R1) + (W1 * R2)

=
28.10%

The portfolio return of Hub Power & Nestle is=

Variance=

28.10%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.486864442

Standard Deviation=
=

SQRT (Variance)
0.697756721

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

69.78%

E [ (R1-R1') * (R2-R2') ] / n
0.0082404

( R2 - R2' )
-5.55112E-16

( R1 - R1' ) * (R2 - R2')

0.090644401

Correlation=
= Covariance / (SD 1 * SD 2)
0.03816871
The correlation of Hub Power & Unilever is approximately 0.04 This means that these two securities
are slightly correlated, they move slightly in the same direction.

Portfolio 3: Hub Power & Bata

Weight of Hub Power=
Weight of Bata=

0.5
0.5

Expected Return (ER)=

(W1 * R1) + (W1 * R2)

=
34.73%

The portfolio return of Hub Power & Bata is=

Variance=

34.73%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.643039829

Standard Deviation=
=

SQRT (Variance)
0.801897642

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

80.19%

E [ (R1-R1') * (R2-R2') ] / n
-0.024205166

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

-0.266256821

Correlation=
= Covariance / (SD 1 * SD 2)
-0.056621115
The correlation of Hub Power & Unilever is approximately -0.06. This means that these two securities
are slightly negatively correlated, they move slightly in the opposite direction.

Portfolio 4: Hub Power & Rafhan Maize

Weight of Hub Power=
Weight of Rafhan Maize=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
23.51%

The portfolio return of Hub Power & Rafhan is=

Variance=

23.51%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.492898156

Standard Deviation=
=

SQRT (Variance)
0.702067059

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

70.21%

E [ (R1-R1') * (R2-R2') ] / n
-0.077952988

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

-0.857482865

Correlation=
= Covariance / (SD 1 * SD 2)
-0.282237717
The correlation of Hub Power & Unilever is approximately -0.3. This means that these two securities
have low negative correlation, they move weakly in the opposite direction.

Portfolio 5: Unilever & Nestle

Weight of Unilever=
Weight of Nestle=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
30.12%

The portfolio return of Unilver & Nestle is=

Variance=

30.12%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.356949937

Standard Deviation=
=

SQRT (Variance)
0.597452874

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

59.75%

E [ (R1-R1') * (R2-R2') ] / n
0.066921743

( R2 - R2' )
-5.55112E-16

( R1 - R1' ) * (R2 - R2')

0.736139176

Correlation=
= Covariance / (SD 1 * SD 2)
0.768037032
The correlation of Hub Power & Unilever is approximately 0.8. This means that these two securities are
highly correlated, they move strongly in the same direction.

Portfolio 6: Unilever & Bata

Weight of Unilever=
Weight of Bata=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
36.75%

The portfolio return of Unilever & Bata is=

Variance=

36.75%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.465236257

Standard Deviation=
=

SQRT (Variance)
0.682082295

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

68.21%

E [ (R1-R1') * (R2-R2') ] / n
-0.061301956

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

-0.67432152

Correlation=
= Covariance / (SD 1 * SD 2)
-0.298128949
The correlation of Hub Power & Unilever is approximately -0.3. This means that these two securities
have low negative correlation, they move weakly in the opposite direction.

Portfolio 7: Unilever & Rafhan Maize

Weight of Unilever=
Weight of Rafhan Maize=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
25.53%

The portfolio return of Unilever & Rafhan Maize is=

Variance=

25.53%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.373378563

Standard Deviation=
=

SQRT (Variance)
0.611047104

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

61.10%

E [ (R1-R1') * (R2-R2') ] / n
0.00151818

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

0.016699976

Correlation=
= Covariance / (SD 1 * SD 2)
0.01142786
The correlation of Hub Power & Unilever is approximately 0.01. This means that these two have a low
correlation, they move weakly in the same direction.

Portfolio 8: Nestle & Bata

Weight of Nestle=
Weight of Bata=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
45.14%

The portfolio return of Nestle & Bata is=

Variance=

45.14%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.551201172

Standard Deviation=
=

SQRT (Variance)
0.742429237

The risk of the portfolio as a whole is =

Covariance=
=

Total

74.24%

E [ (R1-R1') * (R2-R2') ] / n
0.054017376

( R1 - R1' )
( R2 - R2' )
-5.55112E-16 0

( R1 - R1' ) * (R2 - R2')

0.594191136

Correlation=
= Covariance / (SD 1 * SD 2)
0.220428134
The correlation of Hub Power & Unilever is approximately 0.2. This means that these two securities
have low correlation, they move weakly in the same direction.

Portfolio 9: Nestle & Rafhan Maize

Weight of Nestle=
Weight of Rafhan Maize=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
33.92%

The portfolio return of Nestle & Rafhan Maize is=

Variance=

33.92%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.453121442

Standard Deviation=
=

SQRT (Variance)
0.673142958

The risk of the portfolio as a whole is =

Covariance=
=

Total

67.31%

E [ (R1-R1') * (R2-R2') ] / n
0.10439344

( R1 - R1' )
( R2 - R2' )
-5.55112E-16 0

( R1 - R1' ) * (R2 - R2')

1.148327835

Correlation=
= Covariance / (SD 1 * SD 2)
0.659354043
The correlation of Hub Power & Unilever is approximately 0.7. This means that these two securities are
highly correlated, they move strongly in the same direction.

Portfolio 10: Bata & Rafhan Maize

Weight of Bata=
Weight of Rafhan Maize=

Expected Return (ER)=

0.5
0.5

(W1 * R1) + (W1 * R2)

=
40.55%

The portfolio return of Bata & Rafhan Maize is=

Variance=

40.55%

[(W1*SD1)+(W2*SD2)+2(W1*W2*COV)]
=
0.698380797

Standard Deviation=
=

SQRT (Variance)
0.835691807

The risk of the portfolio as a whole is =

Covariance=
=

Total

( R1 - R1' )
0

83.57%

E [ (R1-R1') * (R2-R2') ] / n
0.250115809

( R2 - R2' )
0

( R1 - R1' ) * (R2 - R2')

2.7512739

Correlation=
= Covariance / (SD 1 * SD 2)
0.79780689
The correlation of Hub Power & Unilever is approximately 0.8. This means that these two securities
are highly correlated, they move strongly in the same direction.

Summary of Portfolio Analysis

All securities in each portfolio carry equal weight.
Portfolio 1= Hub Power & Unilever
Portfolio 2= Hub Power & Nestle
Portfolio 3= Hub Power & Bata
Portfolio 4= Hub Power & Rafhan Maize
Portfolio 5= Unilever & Nestle
Portfolio 6= Unilever & Bata
Portfolio 7= Unilever & Rafhan Maize
Portfolio 8= Nestle & Bata
Portfolio 9= Nestle & Rafhan Maize
Portfolio 10= Bata & Rafhan Maize

Portfolio

Return Risk

Portfolio 1= Hub Power & Unilever

Portfolio 2= Hub Power & Nestle
Portfolio 3= Hub Power & Bata
Portfolio 4= Hub Power & Rafhan Maize
Portfolio 5= Unilever & Nestle
Portfolio 6= Unilever & Bata
Portfolio 7= Unilever & Rafhan Maize
Portfolio 8= Nestle & Bata
Portfolio 9= Nestle & Rafhan Maize
Portfolio 10= Bata & Rafhan Maize

19.71%
28.10%
34.73%
23.51%
30.12%
36.75%
25.53%
45.14%
33.92%
40.55%

71.07%
69.78%
80.19%
70.21%
59.75%
68.21%
61.10%
74.24%
67.31%
83.57%

Portfolio Analysis
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%

30.00%
20.00%
10.00%
0.00%

Return
Risk

0.00%

Decision:The basic purpose of portfolio is to diversify the risk. So we take decision on the basis of risk or standard
deviation of portfolio. The risk of portfolio 5 of Unilever & Nestle is less as compared to other portfolios
which is 59.75%. So being investor we choose the portfolio of Unilever & Nestle.