Title: Relationship of Siemens with Nifty Index
Author: Sanith Thyagarajan
Introduction: – Siemens is a technology company focused on industry, digital transformation infrastructure, transport, and transmission and generation of electrical power. It is a flagship listed company of Siemens AG in India.
Objective: – To calculate beta and find its significance.
Views: –
“The fast-evolving e-mobility infrastructure market in India is important for Siemens due to its high growth potential. The enhanced portfolio will enable Siemens to meet market requirements such as homologation and local value-add with cost-competitive solutions. With this acquisition, we now have a strong platform to address our customers’ needs with locally designed and produced products,” said Markus Mildner, CEO of eMobility at Siemens Smart Infrastructure.[1]
Fundamental Radar: 3 segments to drive revenue CAGR of 15% for Siemens over FY23-26, says Sneha Poddar, Motilal Oswal Financial Services.[2]
Data collection: – Data was downloaded from the website nseindia.com. Data was extracted for the period 1-11-22 to 31-10-2023, and all the data except the data and closing price for the end of the week were excluded. The returns were calculated with the previous week’s return as the base.
Weekly returns of Nifty = X
Weekly returns of Siemens Equity = Y
Linear Regression was carried out.
Data Analysis: –
The regression equation is Siemens = 0.3815 – 0.2315Nifty
The above equation shows the relationship between Siemens and Nifty Index. Equity is the dependent variable and Nifty is the independent variable. The correlation is 0.096. The negative sign of b indicates that, if Nifty rises Equity falls, and vice versa. If Nifty rises one unit i.e., Nifty rises by one rupee then Equity will fall by 4 paise. t-stat for b (co-efficient of Nifty) is -0.65 and the p-value is 0.51, meaning Nifty is statistically significant for Equity at 51% level. Number of observations are 49. R squared is 0.00, which means less than 1% of change in Equity is explained by Nifty, which means 99% is the error due to variables, which are not included in the model. F is 0.429 and the p-value is 0.51, which means the overall model is statistically significant at an 51% level.
Conclusions:
Beta is -0.231
Since Beta is -0.231 which is less than 1, it is advisable to invest for a long time as it is less volatile.
References:
[2]https://economictimes.indiatimes.com/markets/stocks/news/fundamental-radar-3-segments-to-drive-revenue-cagr-of-15-for-siemens-over-fy23-26-says-sneha-poddar/videoshow/106159106.cms?from=mdr
[3]https://www.nseindia.com/