Title: – Relationship of State Bank of India with Nifty 50 and to calculate its Beta.
Author: – Simpee pal
Introduction: – State Bank of India stands as the nation’s largest and oldest public sector bank, playing a pivot role in financial landscape of India. With a rich history dating back to 1806, SBI has evolved into a beacon of stability and trust, offering a comprehensive range of banking and financial services.
Objective:- To calculate Beta of State Bank of India and see its significance.
Literature Review/ View & Review: – 1) ANOVA: – ANOVA table assesses the overall significance of the regression model. F is used to test if there is significant linear relationship between Nifty 50 and Equity. 2) Coefficient: – The coefficient for nifty 50 represent the changes in equity for one unit change in nifty 50.
Data Collection: – Collected the data for Nifty 50 and Equity.
Data Analysis: – SBI shares = 335.97+1.50 nifty
N = 48, Rsquare 0.26, F= 17.13
The above equation shows that relationship of SBI with nifty if nifty rises by one unit SBI will rises by 1.50 units
t- stat for b is 4.140 and the p value is 0.00014 which is less than 0.05 so means nifty does impact on SBI shares .
Rsquare is 0.26 meaning 26% of the SBI is explained by nifty 50 and it has linear relationship meaning 74% depend upon other things like fundamentals.
Conclusion: – As Beta is (1.50) is more than 1, so good for short term investment.
References: – Got this SBI nifty 50 and equity data from yahoo finance and calculated them.
