The risk–return relationship is a fundamental concept in finance, guiding investment decisions and portfolio management. This study empirically examines the relationship between risk and return among 10 actively traded equity stocks over a five-year period (2019–2024). Both systematic risk (beta) and total risk measures (standard deviation and variance) are analyzed to determine their influence on equity returns. Secondary data from NSE, BSE, and financial databases were used, and statistical techniques including descriptive statistics, correlation analysis, regression analysis, and t-tests were employed. The findings reveal a positive and statistically significant relationship between risk and return, with beta emerging as the strongest predictor. Regression results indicate that risk measures collectively explain over 50% of the variance in returns. The study validates the traditional risk–return tradeoff and highlights the importance of incorporating multiple risk metrics for informed investment decisions. Implications for investors, portfolio managers, and policymakers are discussed, emphasizing strategies for optimizing returns while managing risk in dynamic equity markets.
Vijetha et al. (Thu,) studied this question.