Risk and Return Analysis

of Selected DSE Stocks and

Portfolio Evaluation against DSEX
Index (April 2023 – March 2025)

EDOTCO Internal
 Name ID

Salma Begum Chowdhury 2024-1-95-023

Shajid Khan Prapto 2024-1-95-033

GROUP 4
Shurovi Akter Urmi 2024-1-95-052

Nicea Anan 2024-1-95-059

Md. Arif Hossen 2024-1-95-067

EDOTCO Internal
 Objective
• Constructing Portfolio
• Analyze risk and return of Portfolio and compare
portfolios against DSEX Index.

Time Frame: April 2023 – March 2025.

Companies Selected:
• Eastern Bank PLC (EBL)
• Reckitt Benckiser (Bangladesh) PLC (RECKITTBEN)
• Malek Spinning Mills PLC (MALEKSPIN)

EDOTCO Internal
 Company
Overview
Malek Spinning Mills PLC
Eastern Bank PLC (EBL) Reckitt Benckiser (Bangladesh)
• Established 1991 in Dhaka.
• Leading private bank in • Established 1961 in Dhaka.
• Manufactures and sells
Bangladesh (est. 1992). • Manufactures health and
yarn
• Dhaka-based hygiene products
• Largest supplier for RMG
• Customer-focused • Customer-focused
sector
• Aims to be Bangladesh's • Aiming for a healthier
• Commitment to quality and
top financial brand world through its brands.
excellence

EDOTCO Internal
 What is HPR?

Holding Period Return (HPR) is the

total return on an investment or asset over
the period it was held. It's a fundamental
way to measure the profitability of an
investment over a specific timeframe

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 Monthly Return Calculation (HPR)

(HPRs) were calculated using the standard formula:

Here,

P1= Price at the end of current month

P0= Price at the end of previous month

EDOTCO Internal
 Monthly Return (HPR)
Monthly HPR
Month-Year EBL
RECKITTBEN MALEKSPIN
Apr-23 HPR
May-23 -2.86% -1.06% 0% EBL RECKITTBEN MALEKSPIN
Jun-23 0% 2.13% 0%
Jul-23 0% -1.72% 0% 100%
Aug-23 0% 0.71% 0%
90%
Sep-23 0% -1.26% 0%
80%
Oct-23 0% -0.06% 0%
Nov-23 0% 0% 0% 70%
Dec-23 0% 0% 0% 60%
Jan-24 0% 4.77% 11.81%
50%
Feb-24 2.80% 0.39% 21.12%
Mar-24 6.13% -6.39% 1.91% 40%
Apr-24 -21.97% -5.72% 6.95% 30%
May-24 -2.06% -7.96% -15.50%
20%
Jun-24 1.26% 11.73% -7.69%
Jul-24 0.41% 3.69% -4.81% 10%

Aug-24 3.72% 1.52% 6.06% 0%

Sep-24 -5.18% -1.19% -8.57% 2
3 3 3
2
3 3 3 3 3 3 4 4 4 4 4 4
2
4 4 4 4 4 4 5 5 5
r- -2 -2 l- -2 -2 t-
2 -2 c-
2 -2 -2 r-
2
r-
2 -2 -2 l- -2 -2 t-
2 -2 c-
2 -2 -2 r-
2
y n g p v n b y n g p v n b
Oct-24 -2.94% -2.95% -7.29% A
p a Ju Ju u e O
c o e Ja F
e a
A
p a Ju Ju u e O
c o e Ja F
e a
M A S N D M M A S N D M
Nov-24 -7.36% -6.50% -9.36%
Dec-24 7.01% 0.13% -1.24%
Jan-25 -2.18% -6.41% 4.18%
Feb-25 8.03% -1.86% 3.21%
Mar-25 3.30% -3.50% -3.50%

EDOTCO Internal
 Monthly HPR Analysis:

01 02 03
EBL: Generally low RECKITTBEN: MALEKSPIN: Highest
monthly variation with Moderate volatility volatility among the
many 0% changes. with average monthly three. Exhibits
Experiences return of 3.93%. Most significant positive
occasional large monthly changes are (e.g., 21% in Feb '24)
swings (e.g., -22% in within +/- 5%, with and negative (e.g., -
Apr '24 with a some larger 16% in May '24)
subsequent reversal). fluctuations. monthly returns,
indicating higher risk.

EDOTCO Internal
 EBL & RECKITTBEN

Portfolio
EBL, RECKITTBEN &
MALEKSPIN

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 Portfolio Analysis

 Portfolio-1 includes EBL & Reckitt with a 50-50

allocation; this gives us a simple two asset portfolio that
helps us observe how two moderately correlated stocks
behave together over time.

 Portfolio-2 includes all three stocks: EBL, Reckitt, and

Malek Spinning Mills, with equal weights (33.33% each).
Adding Malek introduces a third sector and further
diversification.

 For each month, we calculated the portfolio return by

multiplying each stock’s HPR with its portfolio weight and
summing the results.

Portfolio Return=(w 1​×HPR 1​)+(w 2​×HPR 2​)+.....

EDOTCO Internal
 Portfolio
Analysis

Portfolio Best Monthly Portfolio Return Month Worst Monthly Portfolio Return Month
1 June 2024 at 6.49% April 2024 at - 13.84%
2 February 2024 at 8.10% M ay 2024 at -8.50%

EDOTCO Internal
 Markowitz Efficient
Frontier (Two
Stocks)
• According to Markowitz's
theory, there is an optimal
portfolio that could be
designed with a perfect
balance between risk and
return.

• None of the combinations

offer positive returns, but
Reckitt consistently
outperforms EBL in both risk
and return.

EDOTCO Internal
 Markowitz
Efficient Frontier
(Two Stocks)

• The plotted curve

(orange line) shows the
efficient frontier: the
best possible returns
for each level of risk.
• This graph
demonstrates that
diversification —
mixing assets with
different return/risk
characteristics — can
reduce risk without
sacrificing return

EDOTCO Internal
 Utility Analysis (Two Stocks)

EDOTCO Internal
 Utility
Analysis
(Two Stocks)
•The peak of the curve
shows the most
preferred portfolio for
our investor.

•❌ 100% EBL gives the

worst utility due to
both low return and
high risk.

EDOTCO Internal
 Market Return
v/s Portfolio
Performance

•Portfolio 1: Exaggerated

market movements – bigger

highs, lower lows. More volatile

and highly reactive to market

shifts.

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 Market Return
v/s Portfolio
Performance

•Portfolio 2: Smoother

performance, less deviation

from DSEX. Diversification

led to greater stability.

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 Performance Comparison:
Portfolio 1, Portfolio 2 & DSEX
Metric Portfolio 1 Portfolio 2 DSEX Index
Avg Monthly Return -0.73% -0.52% -0.73%

Standard Deviation 4.16% 4.00% 3.53%

Sharpe Ratio -0.39 -0.35 -0.46

EDOTCO Internal
 Portfolio Evaluation Against DSEX

LOWER VOLATILITY, EFFECTIVE IMPROVED SHARPE RISK-ADJUSTED

BETTER RETURN DIVERSIFICATION RATIO OUTPERFORMANCE
DELIVERED INCLUSION OF MALEK PROVIDED BETTER BOTH PORTFOLIOS
SMOOTHER, MORE SPINNING MILLS RETURNS PER UNIT OF OUTPERFORMED DSEX
STABLE REDUCED RISK. ON SHARPE RATIO.
PERFORMANCE. CORRELATION AND
RISK.

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 ConclusionDiversification Wins
Lower Risk, Better Return
Modern Portfolio theory in
Action
Strategic Diversification

EDOTCO Internal
 Thank you

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