Version 1
: Received: 31 August 2024 / Approved: 2 September 2024 / Online: 2 September 2024 (13:34:31 CEST)
How to cite:
Baranidharan, S.; BHARGAVA, K. A Financial Tool - VaR - for Informed Decision-Making - Indian Banking Companies. Preprints2024, 2024090100. https://doi.org/10.20944/preprints202409.0100.v1
Baranidharan, S.; BHARGAVA, K. A Financial Tool - VaR - for Informed Decision-Making - Indian Banking Companies. Preprints 2024, 2024090100. https://doi.org/10.20944/preprints202409.0100.v1
Baranidharan, S.; BHARGAVA, K. A Financial Tool - VaR - for Informed Decision-Making - Indian Banking Companies. Preprints2024, 2024090100. https://doi.org/10.20944/preprints202409.0100.v1
APA Style
Baranidharan, S., & BHARGAVA, K. (2024). A Financial Tool - VaR - for Informed Decision-Making - Indian Banking Companies. Preprints. https://doi.org/10.20944/preprints202409.0100.v1
Chicago/Turabian Style
Baranidharan, S. and KRITI BHARGAVA. 2024 "A Financial Tool - VaR - for Informed Decision-Making - Indian Banking Companies" Preprints. https://doi.org/10.20944/preprints202409.0100.v1
Abstract
This report provides a comprehensive analysis of portfolio risk management using Value at Risk (VaR) for a banking sector investment portfolio. We evaluate a portfolio composed of SBI, HDFC, Axis Bank, and ICICI Bank, using historical data from July 1, 2023, to June 30, 2024. The report covers the calculation of VaR, portfolio variance, and standard deviation, highlighting the impact of different weightage adjustments on the portfolio’s risk profile. Two scenarios—one with increased weightage in SBI and another with increased weightage in HDFC—demonstrate how changes in asset allocation affect potential losses. The findings emphasize the importance of strategic asset allocation for both speculators and hedgers. Speculators are advised to focus on high volatility and market trends, while hedgers should prioritize stability and risk management. This analysis aids investors in making informed decisions to balance risk and return in their banking sector investments.
Keywords
Portfolio Risk Management, Value at Risk (VaR), Banking Sector Investment, Asset Allocation, Financial Risk Analysis
Subject
Business, Economics and Management, Finance
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
