Abstract:
Risk and return are fundamentally linked, the greater an investment's potential to achieve
higher returns, the greater the risk associated with it. It is very important aspect in the
financial management. Portfolio management will involve the various investments such as
many different types of financial assets. Risk involved in such investment & derived from
them. The necessity of well organized hotels and travels sector is realized in every country's
economical development. This research is aimed to analysis the Risk & Return of hotels and
travels sector in Sri Lanka for the period of 2010 to 2014.In this study, 19 listed hotel and
travel companies are taken as a sample by using random sampling for the purpose of data
analysis. The hypotheses are examined with help of Pearson's correlation and regression
analysis. This study considers earning yield as independent variable and annual earnings
per share return on asset and return on equity as dependent variable where as firm size and
leverage are controlling variables. Data was collected from listed company's annual reports
and journals. As a result of the analysis it could be seen that positive and significant
correlation between the risk and return. It leads a high risk on the investor's fund to earn high
return of Hotel and travel sector. The findings of the study will be useful for investors and
practitioners
