REGRESSION REPORT
Title: :- Regression of Apple Inc with Nifty 50
Author: Ashwini Raju Bhimanpalli [MMS 1ST YEAR]
Introduction : Apple Inc. is an American multinational technology company headquartered in Cupertino, California. Apple is the world’s largest technology company by revenue, with US$394.3 billion in 2022 revenue.[6] As of March 2023, Apple is the world’s biggest company by market capitalization
Objective: Calculation of Beta of Apple Inc. and its Significance.
Literature Review:
1. ChinaEquilibrium Exchange Rate and Trade Balance: A Tale of Apples and Pirates
China is maintaining undervalued currency to fuel its exports. the rapid growth in China exports is offered and after accounting for intellectual property right (IPR) piracy, there is nothing in China overall trade balance to suggest an undervalued exchange rate.
(James Laurenceson & Kam Ki Tang)
2. In the Beginning: Seed and Series A Venture Capital Investing
The origin of apple inc in 1970s and now people are eargly waiting for iPhone and ipads.In 1976 apple had only 3 guys working and sold there computers for 666.66$ and before going public in 1980 at $22 per share, creating about 300 millionaires in the process.
(Theresia Gouw, 2015)
Data Collection:-
Firstly, we have downloaded the data of Apple Inc. and Nifty-50 dated from 1st April 2022 to 31st March 2023 from the official website of Yahoo Finance. 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= Apple Inc Returns
X = Nifty-50 Returns
Hence, the equation becomes,
Y = -0.0086+ 0.90164 Nifty 50
Persistent System Limited weekly Returns = (-0.0086) + (0.90164)(Nifty-50 Weekly Returns)
(t-stat-3.01545)
N = 50 R2 = 0.1592 and F = 9.0929
Significance value=0.004093225
The above equation shows the relationship between X and Y (As b is positive) means there is a direct relationship which implies that if X rises, Y also rises and vice versa. In this equation b=0.901
That is if X rises by 1 unit , Y will rise by 0.901 unit. t-stat for b is greater than critical value Hence b is statistically significant at 5% level of significance level.
R2 = 0.1592 which means 15% of Y i.e. Apple Inc company weekly returns is explained by X i.e. Nifty returns
Conclusion:- beta(b) value is less than 1,Which implies Apple Inc Company is good for long term investment.
Reference:-
James Laurenceson & Kam Ki Tang, “undated”. “China Equilibrium Exchange Rate and Trade Balance: A Tale of Apples and Pirates,” EAERG Discussion Paper Series 0805, School of Economics, University of Queensland, Australia.
Theresia Gouw, 2015. “In the Beginning: Seed and Series A Venture Capital Investing,” Palgrave Macmillan Books, in: Women of The Street, chapter 8, pages 167-190, Palgrave Macmillan..