Relationship between Nifty and Nesco Ltd.
Author – Nihira Nagar (21230023351)
Introduction
Nesco Limited is an India-based company, which is engaged in licensing premises in IT park buildings and providing related services, and licensing premises for exhibitions and providing services to the organizers. The company manufactures equipment such as forging hammers and presses, blow room lines and high production cards for the textile industry and sucker rod pumps for onshore oil recovery.
Objective
To calculate Beta and its significance.
Reviews
Nesco Ltd gives the impression of being laid-back, but like all great investors, he doesn’t let on.
Data Collection
- Data has been collected from yahoofinance.com
- Friday closing price were calculated.
- These prices are from 01/11/2022 to 31/10/2023.
- According to the closing data of the period, return values are collected using the formula of return.
Data Analysis
Y = -2.180 + 3.310 X
N = 49 R2 = 0.100 F = 0.026 T stat = 2.295 P value = 0.0262 Beta = 3.310
The above equation shows us the relationship between Nifty 50 and Nesco Ltd. Nesco Ltd is dependent variable and Nifty 50 is independent variable. The negative intercept implies that when the Return on Nifty50 is zero, the predicted Return on Nesco Ltd. is -2.180. The regression model is statistically significant, and approximately 0.1% of the variability in the Return on Nesco Ltd can be explained by the Return on Nifty50. The positive coefficient for Return on Nifty50 suggests a positive relationship, indicating that as the Return on Nifty50 increases, the Return on Nesco Ltd. is expected to increase. The intercept provides a baseline value, but its practical interpretation might be limited in this context. Overall, the model seems to capture a meaningful relationship between the two variables.
Conclusion
Beta is 3.310 which is more than 1, which mean Nesco Ltd. is better for short term investment.