Evaluating Equity Risk and Return Through Market-Based Analysis

Financial Management, Investment Analysis & Risk Assessment

This work evaluates the risk–return profiles of two packaged food manufacturers from an investor decision-making perspective. Using historical price data, volatility analysis, beta estimation, and the Capital Asset Pricing Model (CAPM), it compares systematic and idiosyncratic risk across firms operating within the same sector. Findings indicate that differences in business models, leverage, and market sensitivity meaningfully affect required returns, underscoring the limits of historical data and the importance of risk-adjusted analysis in equity selection.