Author: Mohammad Nazim
Introduction: Nippon life asset management ltd, a prominent player in the financial landscape, stands as a subsidiary of Nippon life insurance company, one of the Japan largest life insurance companies. Known for its diverse suite of investment products and client -centric approach.
Objective: To calculate Beta and find out its significance.
Views:
The surge in Nippon life asset management limited shares to 52 weeks high at ₹489 on December 20 reflects heightened investor confidence, propelled by a substantial block deal total ₹762 crore. This robust market response underscores positive sentiments surrounding the company’s performance. Notably the company exhibits a strategic inclination towards midcaps sector indicating a deliberate and potentially high rewarding investment strategy.
Data Collection:
Data was downloaded from nseindia.com for 1st October 2022 to 30th September 2023 for nifty as well as for Nippon India limited all the columns were deleted for both the sheets except the date and closing price and the Friday closing price were found for the book. Returns for X&Y were calculated, X being nifty and Y being Nippon ltd. Finally, data analysis was done.
Data Analysis:
Equation: y=a+bx
Regression equation: y=163.0127-0.8309x
Interpretation:
The above equation shows the relation between Nifty50 and Nippon ltd.
Return of Nippon ltd is dependent variable and return of Nifty50 is independent variable.
The number of observations are 50.
-1.13266505 is the t-stat for Y, the p-value is 0.262981.
R square is -1.13266505 which means —- of variance in Nippon ltd are explained by Nifty.
F is -1.13266505, p-value for this is 0.262981 which means model is statistically significant at 1% level.
Conclusion: Beta is -0.8309 which is less than 1 and negative means that the price of the security is volatile and Nippon ltd is not good for long term investment.
