Comparative Analysis of Volatility and Sensitivity in FMCG and IT Stocks: An Empirical Study

Abstract

Purpose: This research paper investigates the volatility of sectoral indices within the Indian stock market, focusing on the Bombay Stock Exchange (BSE). Volatility, a crucial aspect of financial markets, reflects the degree of fluctuation in asset prices over time, influencing investment decisions and risk management strategies. By analyzing the volatility of sectoral indices, this study aims to uncover the underlying patterns and dynamics of different sectors within the Indian economy and their impact on overall market stability. Employing a combination of statistical techniques and empirical data from historical stock market data, the research examines the magnitude and characteristics of volatility across various sectors. Through a comprehensive analysis of sectoral volatility, the paper provides insights into the factors driving fluctuations in sectoral indices, such as economic indicators, regulatory changes, and global market trends, offering valuable implications for investors, policymakers, and market regulators seeking to navigate the complexities of the Indian stock market.

Methodology: Ten BSE listed FMCG, IT companies are considered for the present research work and analysed by using statistical tools.

Findings/Result: The findings of the research hold significance for investors seeking to manage risk and optimize portfolio allocation, as well as policymakers aiming to formulate effective market regulations and interventions to promote market stability. By identifying the factors influencing sectoral volatility and recommending risk management strategies, the paper offers actionable insights for market participants to navigate the challenges and opportunities presented by the Indian stock market. Additionally, the study sets a foundation for future research endeavours aimed at further exploring the complexities of sectoral volatility and its implications for the broader financial landscape.

Originality/Value: This study contributes to the existing literature by filling a gap in the understanding of sectoral volatility within the Indian context, shedding light on the unique dynamics of different sectors and their implications for overall market performance.

Paper Type: Empirical study