TITLE: Relationship of Nifty and NATCO PHARMA
AUTHOR: Navya Shah
Introduction
Natco Pharma is an Indian multinational pharmaceutical company based in Hyderabad, which makes finished dosage formulations and active pharmaceutical ingredients. It is a major producer of branded oncology medicines] and hepatitis C drugs
OBJECTIVE: To calculate Beta Value of NATCO PHARMA and find its significance.
VIEWS AND REVIEWS:
DATA COLLECTION: The data of NIFTY and NATCO PHARMA was collected through NSE Website and was downloaded from 1-March-2021 to 28-February-2022 in an excel sheet. The closing prices were found out. The data was filtered on weekly basis and then weekly returns of both NIFTY and NATCO PHARMA was calculated. The company returns have been regressed on nifty’s returns.
DATA ANALYSIS:
Predicted Y = -0.01692585+ (-0.470842117)X
N=47, R Square= 0.003306677, F= 0.132705886
Tstat(beta)=0.364288191
Tstat (0.05,47)= -0.609973771
The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is NATCO PHARMA’s weekly returns.
The negative sign of Beta tells us the that there is a negative relationship between NIFTY and NATCO PHARMA’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by
(-0.470842117) units.
T calculated is less than T tabulated which means, β is statistically insignificant at 5% confidence level.
R^2 is 0.615990526 which means 61% of Y (NATCO PHARMA) is explained by X. And the balance is explained by error.
F is 0.132706 which is less than table value which means model is statistically insignificant at 5% level.
CONCLUSION:
β is statistically insignificant in case of NIFTY and NATCO PHARMA.