Title:- Relationship Between Nifty 50 and Avenue Supermarts
Author: Anshuman Singh
Introduction: Avenue Supermarts Ltd. (Avenue), operating under the “DMart” brand, is a leading supermarket chain in India with over 280 stores across 13 states. Renowned for its efficient supply chain, strong brand loyalty, and focus on operational excellence, Avenue offers a wide range of daily necessities at competitive prices. Objective: This research aims to analyze the connection between Avenue Supermarts Ltd. (Avenue) stock and the Nifty 50 index by calculating its beta and assessing its significance for investment decisions.
Objective
To find beta and its significance
Views and Reviews
DMart is a strong company with a good track record and significant growth potential. However, the stock is currently trading at a high valuation, and there are some risks that could impact its performance. Investors should carefully consider these factors before making a decision to invest in DMart.
Data Collection: Daily closing price data for both Avenue Supermarts and the Nifty 50 index was collected from Bloomberg Terminal, covering the period January 1, 2023, to December 21, 2023.
Data Analysis: A regression analysis was conducted to estimate the beta of Avenue Supermarts stock. As per the provided image, the following regression equation was obtained:
Y = -0.320454865 + 1.144922282x
This indicates that Avenue Supermarts has a beta of 1.144922. In simpler terms, for every 1% change in the Nifty 50 index, Avenue Supermarts stock can be expected to move 1.14% in the same direction.
Conclusion:
Here the beta is 1.14492228x which is more than 1, which is good for Short term Avenue Supermarts term investment.
Reference
Source of data is collected from Yahoo Finance and Screener Yahoo Finance – Stock Market Live, Quotes, Business & Finance News , Popular Stock Screens – Screener