Author: Prabhnoor Kaur Bakshi
Introduction: PepsiCo is a global leader in the food and beverage industry, renowned for its diverse portfolio of brands. Established in 1965 through the merger of Pepsi-Cola and Frito-Lay, the company has grown into a powerhouse, offering a wide range of products consumed by millions worldwide. With its headquarters in Purchase, New York, PepsiCo operates in over 200 countries, consistently delivering innovative and iconic brands across beverages, snacks, and food.
Objective: To calculate Beta and find its significance.
Views and Reviews: PepsiCo has received both acclaim and critique for its diverse product portfolio and global market presence. Its innovative brand strategies, commitment to sustainability, and widespread distribution networks have garnered praise, while occasional concerns regarding health implications of sugary beverages and environmental impact persist, prompting ongoing scrutiny and calls for further corporate responsibility.
Data collection: Nifty50 and PepsiCo’s closing price was collected from yahoofinance.com. Weekly return of Nifty50 is termed as “X” and weekly return of PepsiCo 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=0.3058+0.9985x
Interpretation:
The above equation shows the relation between Nifty50 and PepsiCo.
The regression equation is in the form of Y = mx + b, where:
- Y represents the dependent variable.
- X represents the independent variable.
Interpreting the coefficients:
- The coefficient is 3058 is the intercept of regression line.
- The coefficient 0.9985 is the slope of the regression line. It indicates the change in Y for a one-unit change in X. In this case, for every unit increase in X, Y is expected to increase by 0.9985 units.
- Number of observations are 50.
- 53 is the t-stat for Y, the p-value for which is 9.145.
- R square is 0.9741. This value indicates that approximately 42% of the variability in the dependent variable can be explained by the independent variables in the model.
- The ANOVA table shows the analysis of variance. The regression has a significant F 1809.29 with a very low p-value 9.1451. This implies that the overall regression model is statistically significant in explaining the variability in the dependent variable.
Conclusion: Beta is 0.3058 which is less than 1, it means that PepsiCo is good for long term investment.
Reference:
http://www.yahoofinance.com/
https://pepsico.com/