Title: Relationship between Adani Enterprise and Market Index: An Analysis
Author: Alifiya Kutbuddin Kanchwala
Introduction: Adani Enterprise is one of the leading conglomerates in India, headquartered in Gujarat. The company operates across various industries such as ports, logistics, power generation, and mining. The purpose of this study is to analyse the relationship between Adani Enterprise’s weekly return and the market index’s weekly return.
Objectives:
1. To calculate the beta of Adani Enterprise
2. To determine the significance of the relationship between Adani Enterprise and the market index
Literature review: The stock market is an important component of the economy as it provides a platform for companies to raise capital for their business operations [Krishnan, 2020].
There have been several studies conducted in the past that have analysed the relationship between a company’s stock returns and the market index. These studies have shown that there is a positive correlation between a company’s stock returns and the market index [Panda, 2015].
Data Collection: The data was collected from the Yahoo finance website for the financial year 2022-2023, and only Friday closing prices were considered for the analysis. The Nifty 50 returns were taken as X, and the Company return was taken as Y. and hence the study is analysing the relationship between Nifty 50 returns and company returns of some asset(s) during the specified time period.
Data Analysis:
Adani Returns = 0.53 + -0.84 Nifty Returns
(-1.04)
N= 49, R2= 0.022, F= 1.08, Significance Value = 0.30
T=stat = -1.04
The above equation shows the relationship between Y and X. Negative sign means there is inverse relationship, which means if X rises and Y falls and Vies-Versa. In this equation b = -0.84. Figure in bracket is T-stat for b it is more than the table value. R2 = 2.2% of Y is explained by X. F = 1.08. The beta is -0.84 which means it is less than 1.
Conclusion:
Here Beta is -0.84 which is less than 1 therefore it is good for long term investment
References:
Krishnan, P. (2020). The Indian Stock Market and Its Impact on the Economy. International Journal of Research and Analytical Reviews, 7(1), 124-130.
Panda, A. (2015). A Study on Relationship between Stock Prices and Nifty. International Journal of Engineering Research and General Science, 3(2), 114-118