Value at risk of telecommunication industry in Malaysia using Variance-Covariance method

An investor wants to diversify their holdings and build the finest portfolio they can while taking the fewest risks. The portfolio may operate in accordance with the selected level of risk for the investors or help them accomplish their objectives. Investors must consider the level of risk that each asset presents when deciding which assets to include in their portfolios, as they cannot predict how much the value of their investments will increase or decrease in the future, which can cause anxiety in the market. The Value at Risk (VaR) is determined in this study using the Variance-Covariance technique for both single and multiple assets. Four businesses in the telecoms sector's stock prices were obtained from the Bursa Malaysia. A suggestion for the ideal portfolio can then be made once the VaR for both single and multiple assets have been calculated, compared, and based on each potential investor's preferred degree of risk. According to the study, a large number of assets have a VaR that is noticeably larger than a single asset does. As a result, if the stock price of one company falls, the same will happen to the stock price of the other company, and vice versa. The study suggests that investors who are risk averse choose Celcom since it has the lowest VaR of any company. If they intend to invest in a portfolio of multiple assets, the VaR for 99% confidence interval is advised for them since it has the lowest VaR. Risk-takers are encouraged to select Telekom Malaysia for their single asset and 95% confidence interval portfolios when they have multiple assets because the VaR for the 95% confidence interval has the greatest VaR. Investors that are risk averse and entirely overlook risk when making investing decisions are said to be risk neutral.