Prediction of Wipro Returns using Box-Jenkins Methodology

Abstract

Forecasting of stock returns is and will always be a vitally important financial notion confronted by investors. Their exist fluctuations in stock returns and investors are always keen to show their interest as they want to take the advantage of potential returns from the organization by way of investing in stocks. Hence, it becomes a matter of concern for investors to predict future stock returns so that they can attain their objective of wealth maximization. This reason creates an urge to explore forecasting of stock returns empirically. This research paper employed ARIMA methodology, developed by Box and Jenkins in 1970, which rely on the previous values of the variable itself. In the paper, this methodology is applied on the stock returns of one of the top IT companies listed on NSE i.e. Infosys Ltd. Data of daily return was collected from 1 April 2008 till 31^st March 2018. Results concluded that ARIMA model had strong capability of forecasting in short run.