Comparative Study of Stock and Bond Markets Volatility and Returns Performance

Author: Thota Haripriya, Y. Rama Krishna, Sindhu

Abstract:
The paper aims to compare the equity and bond market performance and volatility based on the risk associated with them. The benchmarks were considered for equity (sensex) and bond market (composite bond index) for the period of 3 years starting from April 2014 to March 2017. Modigliani risk adjusted method (MM) has been used to measure the returns performance of both the asset classes. The historical volatility has been applied with the standard deviation for bonds and stocks calculated and the result has been compared to know which of the market indicator has the greater volatility during the study period. The volatility of equity during the study period is more when compared to the bond market volatility. The MM approach reveals that the performance of the stock market was better and greater than the bond markets during the period of study.

Keywords:Equity, Bond, Indices, Volatility, Risk free return

DOI:

International Journal of Trade & Commerce (Vol: 6 Issue:1)