Imagine I am to determine the systematic risk of pharmaceutical industry in a certain country, but more than 20 percent of the active companies have not provided their financial information. Is there any option for at least a good estimation?
to measure real systimatic risk, you have to use financial data of all companies... but you can pick a suitable sample of those companies whose data is available and then generalize the result.... second way is measure it by qualitative variable but this is hard to measure....
I agree, but additionally - the financial information which is available shouid be comparable, what seems to be obvious, but often, when cosidered, it isn't.....
its better to find financial data...but another way to calculate risk is providing questionary and send it to some experts...this way can provide qualitative variables and you should change them to quantitative by some methods like decision making
I would suggest the following:
1) Take the average life cycle of all pharmadeutical companies in a country.
2) Take the average life cycle of the products they provide.
3) Calculate the deviation of the company from the median and score in both fields
Any questions?
Thank you all for your answer. I do appreciate it.
But I would like to know what is the best indicator of systematic risk is when facing not-complete data. In this case, I don't have necessary information about the 20 percent of the Pharmaceutical companies.
If you are looking for the coefficient of systematic risk (BETA), and the companies are listed, you can find data on datastream
But lets for the sake of argument, say that there are other good indicators for measuring the systematic risk besides Beta. How can I compare them and come to a conclusion that which indicator is showing systematic risk better in a certain short or long time horizon?
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