In this paper we present stress modeling and mechanical response of set cement sheath in cased wellbore to quantify induced stresses and design of suitable elastic cement system. Many cement systems with latex, Graphite & fiber material have been tested for mechanical properties (Compressive strength, Tensile strength, Poison's ratio and Young's Modulus) and results are evaluated by stress calculations. Stress model calculation matches with previous paper results in this line. Cement mixing is done as per API RP10B2 and cured in molds at 115°C for 72 hours under 3000 psi. Compressive strength was measured on UCS testing machine. Brazillian method has been adopted for evaluating tensile strength of set cement. Sonic wave velocity method used for evaluation of Poison ratio and Young's modulus. Loss of cement bond behind casing due to variation in wellbore pressure during Hydro-Fracturing and casing integrity testing has been observed in several wells. Stresses induced in the cement sheath due to variation of wellbore pressure are the cause of this damage. It has been observed that cement sheath being weaker in tensile strength, often fails due to tensile stresses. Results show that tensile strength is near about 1/10th of compressive strength in Portland cement which supports previous studies in this field. However this ratio is not fixed for all kind of cement system. Stresses developed in set cement system has been calculated by feeding mechanical properties in stress modeling. Based on induced stresses, a safe limit of pressure variation has been determined for many cement system. Hence out of many cement design, suitable cement design can be chosen for a particular wellbore condition. However prediction of wellbore pressure during Hydro-Fracturing and casing integrity testing is necessary in this case. The outcomes indicate that the elastic properties (Poison's Ratio and Young's Modulus) of the casing, cement, and formation play a significant role. Results show that for high pressure variation, cement system with better elastic properties are preferred over compressive strength. Stress calculation methodology helps to optimize the cement system to withstand high pressure during testing and Hydro-fracturing of well. Many cement system with improved elastic properties are tabulated and can be utilized in as per the suitability of wellbore condition.