Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets

Future Business Journal

Table 2 Covariance calculation for stocks A and B with respect to market return

Month no	Stock return (%)	Stock return (%)	Market return (%)	Deviation of market return from its mean	Square of deviation	Product of deviation A	Product of deviation B
Month no	A_R	B_R	M_R	M_R − M_avg	(M_R − M_avg)²	(A_R − A_R,avg) × (M_R − M_Ravg)	(B_R − B_R,avg) × (M_R − M_Ravg)
1	−1.71	1.53	−0.86	−0.18	0.03	0.53	−1.47
2	10.10	−4.10	−6.45	−5.77	33.34	−50.96	−15.18
3	0.59	−20.73	−5.97	−5.29	28.00	3.58	74.11
4	9.09	8.33	9.50	10.18	103.70	79.67	153.36
5	−4.95	−20.05	−5.31	−4.63	21.44	28.81	61.69
6	−13.09	−48.27	−21.94	−21.26	452.14	305.43	883.32
7	16.30	22.19	6.23	6.91	47.73	103.85	199.80
8	2.38	−3.24	1.43	2.11	4.467	2.34	7.37
9	2.51	−39.56	−13.25	−12.57	158.02	−15.52	412.68
10	−11.95	−60.49	−31.39	−30.71	943.03	405.88	1650.94
11	6.64	−11.07	−7.65	−6.97	48.54	−37.38	30.25
12	5.95	29.67	5.75	6.43	41.33	30.07	234.03
13	4.38	−59.09	−2.37	−1.69	2.85	−5.24	88.32
14	−2.83	−16.81	−5.99	−5.31	28.20	21.79	53.53
15	−6.15	9.27	8.41	9.09	82.71	−67.46	145.51
16	−1.53	27.59	14.86	15.54	241.56	−43.57	533.36
17	−1.47	42.75	22.03	22.71	515.77	−62.28	1123.64
18	15.58	−29.76	−0.91	−0.23	0.05	−3.24	5.22
19	9.02	21.55	1.87	2.55	6.51	19.78	72.16
20	−10.77	6.61	5.72	6.40	40.98	−77.05	85.39
21	1.15	3.15	8.53	9.21	84.75	−1.07	90.96
22	7.65	−18.38	−7.74	−7.06	49.86	−45.02	82.25
23	0.81	−5.23	6.08	6.76	45.76	−3.12	10.12
24	−7.18	2.64	3.08	3.76	14.17	−31.82	35.28