Relationship of Voltas Company & Nifty-50
Author – Vaishnavi Kishor Padwad
Introduction –
Voltas Limited is an Indian multinational home appliances and consumer electronics company headquartered in Mumbai, Maharashtra, India. It designs, develops, manufactures and sells products including Air Conditioners, Air Coolers, Refrigerators, Washing machines, Dishwashers, Microwaves, Air purifiers, Water dispensers. The company was incorporated on 6 September 1954 in Mumbai, as a collaboration between Tata Sons and Volkart Brothers. Its shares are traded on National stock exchange as well as Bombay stock exchange too.
Objective –
Calculate the Beta of the “VOLTAS Company” and see its significance.
Data Collection –
Firstly, we have downloaded the data of Voltas and Nifty-50 dated from 1st April 2021 to 31st March 2022 from the official (old) website of National Stock Exchange(nseindia.com). Firstly, we have taken the data of Nifty-50 and after deleting all the column except date and closing stock, we have added the weekday column in the data using weekday function of excel, then we have deleted all rows except the 5th day (Friday) rows. Then we have added another column named as Returns column where we have found the returns by using the values in closing stock column and named it as X (which will be X for regression also). Similarly repeating all these steps for our selected company, we named it as Y (which will be Y for regression also). Here is how we have collected the X and Y values.
Data Analysis –
We can write the equation in the form of Y = a + b(X)
Where, Y = Voltas Returns
X = Nifty-50 Returns
a = intercept and b = slope
Hence, the equation becomes,
Y = 0.1812 + (1.2047)*X
Voltas Returns = (0.1812) + (1.2047)*(Nifty-50 Returns)
(4.1636)
n = 45 R2 = 0.2873 and F = 17.3362
Conclusion –
The above equation in the Data analysis explains us the relationship between X (Nifty-50 Returns) and Y (Voltas Returns).
If X rises by 1 unit, then Y will rise by 1.2047 units and vice versa.
Figure in bracket just below the equation i.e. (4.1636) is the value for t-stat for b for which the p-value is 0.000148, which is less than 0.05 implies that b is statistically significant at 5% significant level.
R2 is 0.2873 which means 28.73% of Y is explained by X and remaining 71.27% is error.
The value of F is 17.33624 and the p-value for which is 0.000147652, which is less than 0.05, which means the overall model is statistically significant at 5% significant level or 95% confidence level.