Stock Market Analysis Of Commercial Bank

1371 words - 6 pages

In this paper we will make the stock market analysis and commentary on the quotations of the Commercial Bank for the years 2007 and 2008 based on its prices in the Athens Stock Exchange.

SECTION I
PERFORMANCE AND AVERAGE YIELD
The performance of a share is equal to the percentage difference between the initial and final property owner. The average yield value is calculated as the sum of the yield of a share to the number of returns. As far as the Commercial Bank is concerned, the average stock performance for the year 2007 was 0.28% and 2.24% for 2008. Based on the values of the general price index, the average yield for 2007 was 0.26% for 2008 and 1.95%.
We observe that for the ...view middle of the document...

0003 in 2007 and 0.005 in 2008. The corresponding figures in the general price index are 0.0005 and 0.003. We see that for 2007 as the price fluctuation of the Commercial and the overall index is very small with just over a second. Based on what mentioned above, we conclude that the risk to have less performance than expected is quite small. For 2008, we observe an increase in fluctuations of both stock and overall index, with the variation in the overall index remains higher.

STANDARD DEVIATION
The standard deviation is defined as the positive square root of variance. The standard deviation is the most important parameter of a distribution, since it has very good properties and is used as a sure measure to calculate the average deviation from the central tendency. The standard deviation in the population is: √(〖var〗^2 ) = var
It is a measure of risk calculation. The high standard deviation indicates a large number of possible paths to a share, hence high volatility and therefore risk.

The standard deviation of our stock for 2007 is 0.019 and 0.069 in 2008. For the general price index the standard deviation of 2007 are 0.022 and 0.055 in 2008. For 2007 the standard deviation of the stock is less than the overall index and therefore a lower risk. Unlike in 2008 is higher than the overall index thus shows high variability and a higher risk than the general index as well as those of 2007.

SECTION II
RISK FACTOR BETA
The risk factor beta (BETA) measures the sensitivity of the performance of a stock market fluctuations and gives a better measure of risk in a large stock portfolio. Statistics calculated by the method of Canonical Least Squares for time series yields and stock returns of the market portfolio. It can also be calculated by the ratio of the covariance of returns on the stock market returns on the volatility of market returns. The coefficient b (beta) or simply b is the slope of the linear regression equation between the yields and the stock market returns, ie the general index G.D.CH.A.A
The coefficients b in small companies tend to be smaller because the marketability of these companies are smaller than larger companies. .

The basic relation of calculation of factor b is below:

Where:

• is the coefficient b for the stock i
• is the covariance of return on stock i, and market performance
• is the variation in market performance

Values of beta can be characterized as follows:
B less than 0:

Negative beta price is feasible but no likely. There was the view that the very good stocks have a negative beta values, but this is not true.

B Equal to 0:

Assuming zero inflation, cash flow!

B between 0 and 1:

Investments small variation (e.g., shares utilities).

B Equal to 1:

Assign the index.

B Greater than 1:

Everything is more volatile than the index.

B much larger than 1:
Impossible, because the share is expected to fall to zero in any market downturn.

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