Title: Relationship between Nifty 50 and HDFC Bank
Author: Hitakshi Chugh
Introduction: The HDFC bank was inaugurated in 1994. It started deploying banking services as a Scheduled Commercial bank in 1995. The Housing Development Finance Corporation Limited was the first company to set up a private bank in India. It provided services from the registered bank in Mumbai. The current CEO of the HDFC bank is Mr. Sashidhar Jagdishan. The main aim of the HDFC bank was to become a world-class Indian Bank.
Objective: To find beta and its significance
Views and Reviews: Millson, F. and Kirk-Smith, M. (1996) in their article, indicated that members of Quality Committees (QCs), were positive in their views towards QCs’effectiveness. A change in actual performance was the most relevant measure.
East (1997) in his article, opinionated that the quality of services offered would determine customers’ satisfaction. For this reason, research on customers’ satisfaction was often closely associated with the measurement of quality.
Data collection: The data was collected for Nifty 50 and HDFC bank for the period 01/10/2022 to 30/09/2023 from NSE India Index. The data was downloaded in csv file and then the regression analysis was done for their weekly returns.
Data analysis: The regression equation is as follows-
Y= 0.1451110509 + (-0.076061626) X
The above equation shows us the relationship between weekly returns of Nifty 50 and weekly returns of HDFC Bank.
The Weekly returns of Nifty 50 is independent variable, and the weekly returns of HDFC Bank is dependent variable. The negative sign shows that if weekly returns of Nifty 50 rises, weekly returns of HDFC Bank falls and vice versa.
It implies that if the weekly returns of Nifty 50 (X) increase by 1 unit, the weekly returns of HDFC Bank (Y) is expected to decrease by approximately 0.076061626 units.
The number of observations is 49 and R square is 0.001760072, which means 0.17% of weekly returns of HDFC Bank depends upon weekly returns of Nifty 50. In other words, 99.83% is error which may be due to other variables which are not taken in the model.
F is 0.082869256 and P-value is 0.774711702 which means that the overall model is not statistically significant.
Conclusion: Here beta is -0.076061626 which is less than one so HDFC Bank is good for long term investments.
Reference: https://www.nseindia.com/