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Risk and Return – What have we missed?

Author

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  • Georgi Turlakov

    (Humboldt University of Berlin)

Abstract

This study examines the relations between diversification, size and return of the active companies in the UK market. The literature on this topic provides contradictory findings with empirical result supporting two interchangeable hypotheses – positive or negative correlation between return and diversification as well as return and size. The report provide stable difference between the two classes in favour of the diversified firms. The analysis support the idea of significant positive relation between the factors with broad support from the literature.

Suggested Citation

  • Georgi Turlakov, 2015. "Risk and Return – What have we missed?," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, issue 1, pages 40-49, November.
    • Handle: RePEc:vra:journl:y:2015:i:1:p:40-49
    as

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    File URL: http://www.su-varna.org/izdanij/2015/Econom-2015/Pages%2040-49.pdf
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    References listed on IDEAS

    as
    1. Farok J Contractor & Sumit K Kundu & Chin-Chun Hsu, 2003. "A three-stage theory of international expansion: the link between multinationality and performance in the service sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(1), pages 5-18, January.
    2. Chandra Shekhar Bhatnagar & Riad Ramlogan, 2012. "The capital asset pricing model versus the three factor model: A United Kingdom Perspective," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 2(1), pages 51-65, February.
    3. Philip Brown & Terry Walter, 2013. "The CAPM : Theoretical Validity, Empirical Intractability and Practical Applications," Abacus, Accounting Foundation, University of Sydney, vol. 49, pages 44-50, January.
    4. N Capar & M Kotabe, 2003. "The relationship between international diversification and performance in service firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(4), pages 345-355, July.
    5. Chandra Shekhar Bhatnagar & Riad Ramlogan, 2012. "The capital asset pricing model versus the three factor model: A United Kingdom Perspective," International Journal of Business and Social Research, LAR Center Press, vol. 2(1), pages 51-65, February.
    6. Banz, Rolf W., 1981. "The relationship between return and market value of common stocks," Journal of Financial Economics, Elsevier, vol. 9(1), pages 3-18, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    risk; return; size; diversification; CAPM (Capital Asset Pricing Model);
    All these keywords.

    JEL classification:

    • A00 - General Economics and Teaching - - General - - - General

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