Stock Market Recommendations: Does it Help Investors?

Vidyasagar University Journal of Commerce; Vol. 16, No.1, 17-30, 2011; ISSN 0973-5917

14 Pages Posted: 26 Aug 2014

Date Written: March 31, 2011

Abstract

The brokerage firms and financial institutions recommend for buying and selling shares throughout the year. The objective of the paper is to investigate whether there is any scope to earn higher return than the market on the basis of recommendation offered. This paper has considered one eighty five recommendations from twenty firms spreading over a period from November 2005 to February 2007. The investment horizons of these recommendations have been taken as three months and six months. The return analysis of all recommendations for the whole period and in four different sub-periods has been determined. The analysis of beta suggests that average return from recommendation is lower than market return. The risk adjusted returns yielded by recommendation of different firms have been determined on the basis of Sharpe ratio, Trenor ratio, Jensen measure and finally Sortino ratio. It was observed from the analysis that the stock market recommendations might help the investor selectively.

Keywords: Stock Market; Stock Market Recommendation; Sharpe Ratio; Jensen measure; Sortino Ratio

JEL Classification: G11; O16

Suggested Citation

Bandopadhyay, Kalpataru and Rakshit, Debdas, Stock Market Recommendations: Does it Help Investors? (March 31, 2011). Vidyasagar University Journal of Commerce; Vol. 16, No.1, 17-30, 2011; ISSN 0973-5917, Available at SSRN: https://ssrn.com/abstract=2486134

Kalpataru Bandopadhyay (Contact Author)

Vidyasagar University ( email )

Department of Commerce, Vidyasagar University, Wes
Midnapur, West Bengal 721102
India
9434665183 (Phone)

HOME PAGE: http://vidyasagar.ac.in/Faculty/Profile?fac_u_id=Fac-COM-59

Debdas Rakshit

University of Burdwan ( email )

Burdwan
Burdwan University
Burdwan, West Bengal 713104
India

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