Title: Relationship of Voltas Ltd with Nifty and to calculate Beta.
Author: Vanshika Jain
Introduction: Voltas Ltd is an Indian multinational company that specializes in air conditioning and cooling technology. Established in 1954, it is a prominent player in the engineering and project services industry. A part of the Tata Group, Voltas is renowned for its innovative and energy-efficient solutions in air conditioning, refrigeration, and electro-mechanical projects. The company has a global presence and a strong commitment to sustainability. With a rich history and a focus on technological excellence, Voltas continues to be a leading name in the HVAC (Heating, Ventilation, and Air Conditioning) sector.
Objective: To calculate beta and to see its significance.
Literature Review:
- Title: “Optimizing Growth: The Role of Performance Appraisal in HR Evaluation and Development at Voltas Ltd”
Summary: Khurana et all, Performance appraisal is a pivotal component of human resource management at Voltas Ltd, playing a fundamental role in assessing and fostering employee development. This systematic evaluation process allows the organization to recognize high-performing individuals, identify areas for improvement, and provide constructive feedback. The appraisal system is designed to align with organizational goals, facilitating strategic decision-making in talent management, succession planning, and training initiatives. The appraisal process provides a platform for constructive feedback, facilitating open communication between employees and management. This, in turn, fosters a culture of continuous improvement and employee engagement. Moreover, the data collected during performance appraisals can inform strategic decision-making in talent management, succession planning, and training initiatives. Voltas Ltd recognizes that the success of this philosophy of the company depends in a large measure on the manner in which managers and their team members – at every level – carry out their duties and obligations to each other and to the company. Without mutual confidence and loyalty among employees, as well as respect for each other as human beings, its philosophy will not work.
- Title: “A Unified Framework – Generalizing the Beta Distribution and Its Diverse Applications”
Summary: James B. McDonald et all, The paper, “A Generalization of the Beta Distribution with Applications,” presents a comprehensive exploration of an extended version of the beta distribution and its practical applications across diverse fields. The authors begin by providing a theoretical foundation for the generalized beta distribution, highlighting its mathematical properties and characteristics. They discuss how this extension allows for a more flexible and nuanced representation of probability distributions, transcending the limitations of the traditional beta distribution. The paper not only contributes to the theoretical advancements in probability distributions but also emphasizes the practical utility of the generalized beta distribution in addressing real-world complexities. The flexibility and adaptability of this model make it a valuable asset for statisticians, researchers, and practitioners seeking a more robust and versatile approach to modelling a wide array of datasets. The comprehensive exploration of applications highlights the significance of this generalization in advancing the field of probability theory and its practical implications across disciplines.
Data Collection: The data for Nifty and Equity for Voltas Ltd has been downloaded from Nse.com and finance.yahoo.com for the period 1st Nov 2022 – 31st Oct 2023. The data was manipulated for closing price of nifty and equity. The weekly returns of nifty and equity were found.
Data Analysis:
Voltas Share= -0.414 + 0.009Nifty
n= 48, R square = 0.08, f= 0.041
The above equation shows the relationship of Voltas Ltd with Nifty. If Nifty rises by 1unit, Voltas will rise by 0.009unit.
t- stat for b is 0.203 and the p value is 0.839 which is more than 0.05, so b=0 , meaning Nifty does not impact Voltas Ltd shares.
R square is 0.08, meaning 8% Voltas Ltd shares is explained by Nifty, meaning 92% depends on other things like fundamentals.
f= 0.041 and p value is more than 0.05, so the model is not statistically significant at 5% level.
Conclusion:
As beta (0.009) is less than 1, so good for long term investment.
References:
- James B. McDonald, Yexiao J. Xu, A generalization of the beta distribution with applications, Journal of Econometrics, Volume 66, Issues 1–2,1995, Pages 133-152, ISSN 0304-4076, https://doi.org/10.1016/0304-4076(94)01612-4
- Khurana, Ashok and Goyal, Kanika, Performance Appraisal: A Key to HR Assessment and Development (November 24, 2010). http://dx.doi.org/10.2139/ssrn.1714151