Risk & Return Analysis of Oil and Gas Sector of India: A Study of BSE Indices
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Abstract
The Oil and Gas industry of India is growing rapidly and playing an important role for the development of Indian economy. The sector meets more than two third of the total primary energy needs of the country. The Oil & Gas Sector has been actively involved in putting India on the world map. The oil and gas industry has rebounded strongly throughout 2021, with oil prices reaching their highest levels in six years. While the industry’s recovery is better than expected, uncertainty remains over market dynamics in the coming year. The development of the Indian economy is greatly aided by the stock markets. In comparison to other industries, the Oil and Gas sector accounts for a significant portion of the Indian stock market. This study examines the risk-return relationship between the BSE Sensex and stocks in the oil and gas sector from 01st April 2017 to 31st March 2022. The present study has been conducted by taking return variables i.e. annual mean return, minimum and maximum. The standard deviation, variance and coefficient of variance were used as the measures of risk factors. This study investigates the correlation between risk and return of the BSE Sensex and Oil and Gas Sector stocks of BSE 30 i.e. Indian Oil Corporation, ONGC, Oil India Corporation Limited, Hindustan Petroleum Corporation Limited and Gas Authority of India Limited. The study is based on secondary data and the analysis was done for testing the presence or absence of risk and return of Oil and Gas Sector and for testing hypothesis, different statistical methods like correlation, regression, descriptive statistics and t-test have been employed
Keywords
Risk and Return, Oil and Gas Sector, Beta, BSE, Stock Market.
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