Regression Analysis of Weekly Returns between NIFTY50 and Eicher Motors Ltd.
Author: Eshika Nitin Malusare
MBA FINANCE
Introduction:
Eicher Motors Limited is an Indian multinational automotive company that manufactures motorcycles and commercial vehicles, headquartered in New Delhi. Eicher is the parent company of Royal Enfield, a manufacturer of middleweight motorcycles. Eicher Motors is a commercial vehicle manufacturer in India.
Objective:
To understand the regression relationship between weekly returns of Nifty 50 and Eicher Motors Ltd.
Data Collection:
The closing price data of Nifty50 and Eicher Motors Ltd was taken from www.nseindia.com for the time period of 1st April 2021 to 31st March 2022. From the available data closing price and date where taken and other where deleted, before closing price days where finded by using formula =weekday(date) and then day where sorted into Fridays(5) to find out returns for both Nifty50 and Eicher Motors Ltd. Returns where calculated by using formula =(c3-c2)/c2*100.
Once the data is calculated of Return, for Nifty50 is considered as ‘X’ and Eicher Motors Ltd as ‘Y’.
Data Analysis:
Regression data was calculated in Excel tool from that we got below values.
X= 1.500798932
Y= -0.578149723
R Square= 0.4785
F= 39.4600
P value = 1.42262
Conclusion:
Based on above equation we can conclude that the F value is greater than table F value, overall this model is not good has it is not statistically significant. So Eicher Motors Ltd. Is not a good company has it is high risk.