Comparative Risk-Return Analysis of Cryptocurrencies and Indian Stock Indices: Insights for Investors in Emerging and Traditional Markets

Abstract:  This study examines the risk-return profile of Cryptocurrencies compared to Indian stock Indices, BSE Sensex and Nifty 50, to identify their unique investment characteristics. By analysing data from ten major Cryptocurrencies alongside Sensex and Nifty 50, the study applies statistical measures, including mean, variance, skewness, kurtosis, Jarque-Bera (JB) test, two-sample t-test, ANOVA test and Tukey HSD test. Findings reveal that Cryptocurrencies offer higher returns but are significantly more volatile, while Indian Stock Indices provide moderate, stable returns with implications for risk-seeking versus conservative investors. The Study reveals that Cryptocurrencies are suitable for investors who can tolerate high volatility for potentially higher returns, whereas Traditional Stock Indices are better suited for those prioritising stability and consistent growth.

Cryptocurrencies, Indian Stock Indices, Risk-Return Profile, Portfolio Diversification, Volatility, Investor Risk Tolerance

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