Relationship between Nifty 50 and Unilever
Author – Unnati Sonar
INTRODUCTION :-
Unilever plc is a British multinational fast-moving consumer goods company founded on 2 September 1929 following the merger of British soap maker Lever Brothers and Dutch margarine producer Margarine Unie. It is headquartered in London. Unilever products include baby food, beauty products, bottled water, breakfast cereals, cleaning agents, condiments, energy drinks, healthcare and hygiene products, ice cream, instant coffee, pet food, pharmaceuticals, soft drinks, tea, and toothpaste. It is the largest producer of soap in the world, and its products are available in over 190 countries. Unilever’s largest brands include Axe (Lynx), Ben & Jerry’s, Dove, Hellmann’s, Knorr, Lifebuoy, Lux, Magnum, Omo (Persil), Rexona, Sunlight, Sunsilk, and Wall’s (Heartbrand).[4] The company is organised into five business groups: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream. It has research and development facilities in China, India, the Netherlands, the United Kingdom, and the United States.
In the 1930s, Unilever acquired the United Africa Company. During the second half of the 20th century, the company increasingly diversified from being a maker of products made of oils and fats, and expanded its operations worldwide. It has made numerous corporate acquisitions, including Lipton (1971), Brooke Bond (1984), Pond’s (1987), Hellmann’s (2000), Ben & Jerry’s (2000), SlimFast (2000), Knorr (2000), Alberto-Culver (2010), Dollar Shave Club (2016), and Pukka Herbs (2017). Unilever divested its speciality chemicals businesses to Imperial Chemical Industries in 1997. In the 2010s, under the leadership of Paul Polman, the company gradually shifted its focus towards health and beauty brands and away from food brands that showed slow growth.
Unilever has a primary listing on the London Stock Exchange and a secondary listing on the Euronext Amsterdam, and is a constituent of the FTSE 100 Index and the AEX index.
OBJECTIVE :- To calculate beta and its significance
VIEWS AND REVIEWS :-
DATA COLLECTION :-
Collecting the historical data of Nifty50 and equity prices of Asian Paints from the website of yahoo finance from 01/11/2022 to 31/10/2023. After collection of the entire data in the given period only data of Fridays are taken by sorting the whole data. According to data, return values are collected using formula of return.
DATA ANALYSIS :-
Unilever = 0.112713 + 0.079 nifty
N = 49, R square = 0.01347, F = 0.641741 , P value = 0.427
The above equation shows us the relation between Nifty 50 Index price and Unilever equity price. Unilever is dependent variable and Nifty 50 is independent variable. The “T” sign means the rise in Nifty 50 leads to rise in Asian paints Ltd and vice versa. If Nifty rises by 1 unit, Asian paints rises by 7.9 paisa.
T Stat for B (Coefficient of Nifty) is 0.801 and P value is 0.427 which means Nifty is statistically insignificant for Unilever at one percent level
Number of observations are 49
R square is 0.01347 which means 1.347% of Unilever is explained by Nifty 50. Meaning
98.653 % is the error due to the variable which is not in the model.
CONCLUSION :- In case of Unilever, Beta is 0.1718 which is less than 1 which means Unilever is good for long term investment.
Reference :-