ESSAY ON CHOICE OF INVESTMENT AVENUE AND HEDGE IN CALLIBER: EVIDENCE FROM ICONIC INDICES IN INDIA

Finance

This paper attempts to identify the explanatory power of different investment classes over commodity index. It also studies the hedging opportunity if certain asset classes are added with commodity index in a single portfolio. This paper takes into account the indices such as MCX COMDEX, NIFTY 50 index that represents the equity market in India, gold and USD indices. The period of study is from 2015 to 2019. The tools used for the study includes normal regression and ARCH family model. The result of the study shows that while investing in a portfolio, these asset classes are not best hedgers. Thus, these asset classes are not supposed to be comprised in a single portfolio together. The findings of the study will be helpful for investors to plan their investment avenues.

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