Calculation of Beta for ACC ltd and Its Significance
Author: – Aman Sanjay Ade
Roll no. 021230022569 (OPS BATCH)
Introduction
ACC Limited an Indian cement producer, headquartered in Mumbai. It is a subsidiary of Ambuja Cements and a part of the Adani Group. The company was established in Mumbai, Maharashtra on 1 August 1936.
Data Collection
Data collection for the period starting from 1st January 2022 to 31st December 2022 has been downloaded from nse.com. Then Friday weekly Closing Prices have been calculated.
And weekly data of equity share of the chosen company has been regressed on weekly report of NIFTY50.
Data Analysis
Regression Equation that was formed after the calculations is-
NIFTY 50 (Y) = -0.273967978+0.195051424+ ERROR
B(T Stat) = 1.767769
N= 49, R2=0.062344, F= 3.125007, P Value =0.083591
Interpretation
The equation mentioned above tells us about the relationship between Nifty50(x) value and ACC ltd (y) stock prices. The positive sign of coefficient x variable= 0.195051424 states that there is a direct relation between nifty 50 and ACC ltd.
The correlation coefficient is 0.249688334,
If the nifty 50 increase by 1 unit, the ACC stock will increase by 0.195051424, directly related to each other
In these analysis t – stat of B is 1.767769 at 49 observations
P value is 0.08, which is More than 0.05, means that b is in statistically insignificant at 5%. Even it is more than 0.01, b is insignificant at 1% level.
R2 =0.062344, which means that 6.2344% of Y (ACC) is explained by X (NIFTY), balance of 93.799% is error. Error is due to the variables which are not in the model.
F is 3.125007, the P value for which is 0.08 > 0.01, means overall the model is insignificant.
CONCLUTION
The above equation tells us about the relationship between ACC Ltd. Equity (y) and Nifty 50 (x). The positive sign means there is a direct relationship between them, which means if Nifty 50 increases, then the equity price of ACC Ltd. will also increase
P VALUE is more than 0.01 which is overall model is insignificant.