Relationship between Nifty & ACC
Introduction –
ACC Limited (Formerly The Associated Cement Companies Limited) is one of the largest producers of cement in India. It is a subsidiary of the Holcim Group. On 1 September 2006, the name of The Associated Cement Companies Limited was changed to ACC Limited. The company had been established in Mumbai, Maharashtra on 1 August 1936.
ACC network of over 6,400 employees, 17 cement manufacturing sites, 80 concrete plants and a nationwide presence of over 56,000 channel partners help us serve our customers. The brand ACC is a hallmark of quality and durability in cement and ready-mix concrete – to build homes for all Indians, across cities, towns, villages as well as enduring structures for infrastructure and industry. The success over the years can be attributed to our unrelenting focus on customer centricity, ethical business practices and sustainable development. The differentiated offerings are the result of our deep understanding of every home builder’s needs. This approach makes our portfolio dynamic – spanning cement, construction chemicals, dry mix products and ready-mix concrete.
ACC’s brand architecture comprises the Gold range and Silver range of products assuring superior quality for general construction as well as for specialised applications and environments. Our Leak Block range of construction chemicals help provide 360 ° water resistance to structures
Objective
To calculate β & find its significance
Data collection
The data was gathered from a secondary source, the NSE’s official website. Data on the NSE’s daily closing stock price & the ACC has been gathered. The data has been narrowed down to the weekend (Friday) closing price only.
Data Analysis
Regression Statistics
Multiple R 0.811713838
R Square 0.658879355
Adjusted R Square 0.657492686
Standard Error 112.3360832
Observations 248
Interpretations:
Here, we can observe that the R square value is 0.6588, which means that 65.88% of weekly returns of Nestle India Industries can be explained by Nifty.
We can infer that to the given extent Nestle India does follow the Nifty trend.
ANOVA
df SS MS F Significance F
Regression 1 5996137.136 5996137 475.1525 2.20501E-59
Residual 246 3104371.314 12619.4
Total 247 9100508.449
Interpretations:
H0: Nifty is not influencing the weekly returns of ACC
H1: Nifty is influencing the weekly returns of ACC
Here as the F value is 475.1525 which is more than 4, thus we reject the null hypothesis & accept the alternate hypothesis, concluding that nifty is influencing the weekly returns of ACC
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -38.92722988 101.7991408 -0.38239 0.7025 -239.4363326 161.5818728 -239.4363326 161.5818728
X Variable 1 0.13361438 0.006129664 21.79799 2.21E-59 0.121541061 0.1456877 0.121541061 0.1456877
Interpretations:
We can observe here that the Beta value is 161.58 meaning that 1 unit change in Nifty leads to 61.58 change in weekly returns of ACC. Also, the value of beta is positive indicating the presence of a positive relationship between the two variables.
The P value is 0.006129664 which is less than 0.05, thus the model is significant at 95% confidence interval.