Short term momentum analysis represents the change experienced by stock prices over a specified period of time. The examination of recent past performance represents the status of the short term investments.
Comparison of annualized average return over a market return enables investors to understand the return generating capacity and the performance of stocks.
Global markets crashed after the 2008 recession is one of the best examples. In such a scenario, trend analysis of stocks using a comparison of average returns and market returns provides an investor with information to make optimal investment decisions.
Due to diverse impacts and severe threats to investors, there is a need to examine the annual average returns and market returns of stocks in presence of financial crisis.
The annual average returns of a stock define the earning possibility of investor from a particular investment whereas the market return states the return deriving capacity of all stocks traded in the market.
Stocks categorization is the process wherein stocks are classified into three categories. Ratio analysis is an invaluable tool for stocks categorization.
The study aims in understanding dynamism in the Indian stock market and formulating a model to analyze the dynamic behavior of investors. To this effect, investment in three different stocks i.e. income, growth, and value are studied.