Comparison of the effect of essential oil stock and exchange-traded funds returns

Abstract

The shift of the stock market into an online platform has cause an increasing number of new investors to appear and newer types of assets like Exchange Traded Funds (ETF) to be created, this had led to the investors having more options to invest in than in the past, investors now must consider various factors when selecting an asset to invest in. Previous studies show that stocks are still the preferred investing asset as it has been performing well in the past. In recent times, usage of essential oils has become more prominent as more people are aware of the benefit it brings. This research also aims to see the effect of essential oil securities on both stocks and ETFs. One problem is there has not been research that specifically targets the comparison between stocks and ETFs in order to determine which is the superior asset among the two and the factors affecting the returns of both assets. Secondary data extracted from Yahoo Finance, and Google Finance was gathered for beta, alpha, standard deviation, and trading volume analysis. Assets from period (2016-2021) was used to test relationship with the returns. Findings reveal that the standard deviation, beta, alpha influences the return of both types of assets. It was also determined that stocks generated a higher overall return than ETFs while ETFs had a lower overall risk to invest in than stocks. This shows that there is no clear winner between the stock and ETF and investors should invest based on whether they prefer a higher return or prefer a lower risk.