Title: Relationship of Philips with Nifty50.
Author: Pankhuri Chaudhary
Intro: Founded in 1891 by Gerard Philips in the Netherlands, Philips is a global conglomerate renowned for its innovation in healthcare, consumer lifestyle, and lighting solutions. Initially focused on light bulbs, it diversified into healthcare technology, pioneering advancements in medical imaging, patient monitoring, and healthcare informatics. With a commitment to enhancing people’s lives through meaningful innovation, Philips remains a prominent name, continuously evolving and shaping industries with its cutting-edge technologies.
Objective: To calculate Beta and find out its significance.
Views and Reviews: Philips had shown resilience in its financial performance despite challenges. In Q3 2022, the company reported a sales growth of 9% to €4.98 billion, driven by strong demand in its Diagnosis & Treatment businesses, especially in the healthcare sector. However, fluctuations in global markets and ongoing uncertainties might have impacted its subsequent financial standings.
Data collection: Nifty and Philips’ closing price was collected from yahoo finance website. Weekly return of Nifty is termed as “X” and weekly return of Philips is termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y= 0.68837087 + 1.005240059x
Interpretation:
This regression equation Y=0.68837087+1.005240059x . This equation represents a linear relationship between two variables, Y and x
- Y is the dependent variable that depends on the value of the independent variable x.
- The coefficient of x is 1.005240059, indicating that for every one unit increase in x, Y is expected to increase by approximately 1.005 units.
- The intercept term is 0.68837087, which represents the value of Y when x is zero.
Overall, this equation suggests a positive linear relationship between Y and x, where Y increases with an increase in x, and the intercept indicates the starting point of the relationship when x is zero.
Number of observations are 49.
0.929854 is the t-stat for Y, the p-value for which is 0.357099722.
R square is 0.885799412 which means 89% of variances in Philips are explained by Nifty.
F is 372.313074, p-value for this is 0.357099722 which means model is statistically significant at 1% level.
Conclusion: Beta is 0.1514 which is less than 1, it means that Philips is good for long term investment.
Reference: