Problem Title:
To determine RELATIONSHIP OF Nifty and SAIL.
Author – Saloni Choudhary
INTRODUCTION OF COMPANY
Steel Authority of India Limited (SAIL) is a government owned steel producer based
in New Delhi, India. It is under the ownership of Ministry of Steel, Government of
India with an annual turnover of INR 68,452 Crore (US$9.32 billion) for fiscal year
2020–21. Incorporated on 24 January 1973, SAIL has 62,620 employees (as of 1
February 2022).
With an annual production of 16.30 million metric tons, SAIL is the 20th largest steel
producer in the world and the largest in India. The Hot Metal production capacity of
the company will further increase and is expected to reach a level of 50 million
tonnes per annum by 2025. Smt Soma Mondal is the current Chairman of SAIL.
OBJECTIVE
To calculate beta of company and find its significance
Data Collection:
Data was collected from the NSE Website which comprises of historic data for the
past 1 year. The Friday of each week of the year was taken into consideration. The
resultant was calculated, and regression was performed on the data.
Data Analysis:
We know Y= a +bx1
Where b is the beta value.
H0 – Null Hypothesis
H1 – Alternate Hypothesis
If the beta coefficient is significant, the interpretation is that for every 1-unit increase
in the predictor variable, the outcome variable will increase by the beta coefficient
value.
It was found that R Square is 0.0036, the regression Equation was found to be
Y= 0.2561- 0.0199X
Here Beta value is -0.0199
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.060002
R Square 0.0036
Adjusted R
Square -0.01905
Standard Error 2.152681
Observations 46
Interpretations:
We can see that the R square value is 0.028378, which means that Nifty can explain
0.28 % of the weekly returns of SAIL. Because the proportion is smaller, we may
deduce that SAIL. does not follow the Nifty trend.
Coefficients Standard
Error
t Stat P-value Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept 0.256169 0.317515 0.806793 0.424125 -0.38374 0.896079 -0.38374 0.896079
-0.01992 0.049966 -0.39872 0.692025 -0.12062 0.080777 -0.12062 0.080777
We can observe here that the Beta value is – 0.0199 meaning that 1 unit change in
Nifty leads to – 0.0199 change in weekly returns of SAIL. We also need to note that
the value is beta is negative indicating the presence of a negative relationship
between the two variables.
ANOVA
df SS MS F
Significance
F
Regression 1 0.736725 0.736725 0.158981 0.692025
Residual 44 203.8975 4.634035
Total 45 204.6343
H0: Nifty is not influencing the weekly returns of SAIL.
H1: Nifty is influencing the weekly returns of SAIL.
Here as the F value is 0.158981 which is less than 4, thus we can accept the null
hypothesis and reject the alternate hypothesis, concluding that nifty is not
influencing the weekly returns of SAIL.
Also, the Significance F value is 0.692025 which is more than .025 thus the model
is not significant.