Are Diwali Days more Risky as compared to Normal Days?
Are Diwali Days more Risky as compared to Normal Days?
Are Diwali Days more Risky as compared to Normal Days.......???
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What is Risk?
Risk is the tendency of not achieving the desired results from an investment. It refers to the chance that the actual returns on an investment will differ from the expected returns. Risk involves the possibility of losing some or all of the investment.
Volatility of the asset is assessed to measure the riskiness of an asset.
Higher the volatility, higher the risk there is.
To measure the volatility of an asset, we use a Statistical Measure which is known as Standard Deviation.
Standard Deviation measures the dispersion of returns on an asset in respect to its Mean value. Higher the Standard Deviaition, higher the volatility, thus higher risk.
Calculating the Returns on Normal Days and Diwali Days
Normal Days
Through the similar data, I calculated the Standard Deviation from data 1-01-2012 to 1-01-2022.
The daily standard deviation is calculated which shows how risky is each day.
The calculations are as follows:
I used daily standard deviation because the we need to measure how risky each Diwali is.
The daily Standard Deviation is 1.14%.
DIWALI Days
The yellow colored days are the days of Diwali and I have picked one or two days before/after Diwali because the impact can be seen for various days as Diwali includes other festivals along with it as well.
The calculations are as follows:
As the Deviation is more on Normal Days as compared to Diwali Days, this means, Diwali Days are more stable and safer days.
This can be due to low volatility in these days as the total turnover is much lower than other days.
CONCLUSION
At the end, we can say that, Diwali Days are less risky days when compared to Normal Days.
HAPPY INVESTING!
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