Relationship between the Nifty & Apollo Tyres Limited.
Author:
Akanksha Rohra
Introduction:
The global Indian tire manufacturer Apollo Tires Ltd. has its main office in Gurugram, Haryana. After it was incorporated in 1972, Perambra in Chalakudy, Kerala, India, became the site of its first plant. Currently, the company operates five manufacturing facilities in India, one each in the Netherlands and Hungary. Its network of around 5,000 dealerships in India includes more than 2,500 exclusive locations.
India accounts for 69% of the company’s sales, followed by Europe (26%), and other countries (5%).
Objective:
To calculate the Beta and its Significance.
Data Collection:
The NSE website has provided data for Equity & Nifty covering the period from December 1, 2022, to November 30, 2023. To determine the Friday closing price, the data was altered and modified. Weekly returns from the Nifty were identified as “X,” and weekly equity reports were identified as “Y.”
Data Analysis:
Regression Equation= 0.4695 + 1.0045 (X) + e.
T- stat = 1.074868, N=50, R^2= 0.9586, F=1089.4498.
- The coefficient for the independent variable, X, is 1.0045, implying that, holding other variables constant, a one-unit increase in X is associated with an average increase of 1.0045 units in the dependent variable, Y.
- The t-statistic for the coefficient of X is 1.074868, used to test the null hypothesis that the true coefficient value is zero. However, at conventional significance levels (e.g., 0.05), the t-statistic of 1.074868 does not significantly differ from zero. It is essential to consider both the chosen significance level and the context of the analysis.
- With a sample size (N) of 50, the regression analysis is based on data from 50 observations. The R-squared value (0.9586) indicates that approximately 95.86% of the variability in Y is explained by the independent variable, X. A high R-squared value suggests a well-fitting model.
- The F-statistic, standing at 1089.4498, is employed to assess the overall relevance of the regression model. The high F-statistic value indicates statistical significance for the model.
- In summary, the model demonstrates robust explanatory power (high R-squared), and its statistical significance is underscored by the substantial F-statistic. However, the t-statistic for the coefficient of X does not significantly differ from zero at standard significance levels. To ensure result validity, it is crucial to consider the context of the analysis and potentially conduct further hypothesis testing or diagnostic assessments.
Conclusion:
As Beta is less than 1 it is good for investment in the short run.
Reference:
Relationship of Apollo Tyres with Nifty 50 – Research Ideas (sachdevajk.in)
Relationship between the Nifty & Apollo Tyres Limited. – Research Ideas (sachdevajk.in)
