Title of the Report: Relationship Between Nifty and Equity
Author: Diya Keswani
Roll No: 21230023682
Introduction: The 138-year-old Ayurvedic company, promoted by the Burman family, started operations in 1884 as an Ayurvedic medicines company. From its humble beginnings in the by lanes of Calcutta, Dabur India Ltd has come a long way today to become a transnational consumer goods company with the largest herbal and natural product portfolio in the world. Dabur has successfully transformed itself from being a family-run business to become a professionally managed enterprise. What sets Dabur apart is its ability to marry traditional knowledge of Ayurveda with modern-day Science to roll out efficacious products that are tailored to suit the specific needs of consumers across the globe. As a Promoter-owned but Professionally managed Company, Dabur has always set new standards in Corporate Governance & Innovation
Objective: To calculate beta and its significance of the equity stock of Dabur
Data Collection: Data is 4/11/22 to 27/10/23 is downloaded by BSE website
Procedure For Data Collection: First I logged on to BSE official website www.yahoofinance.com then I clicked on historical data via (http://finance.yahoo.com/quote/dabur/history) Then I selected the period 01/11/2022 to 31/10/2023
After downloading the csv files of both BSE index and dabur I proceeded to calculate beta of the stock of dabur
Data Analysis:
For calculating the weekly returns of the stock and the bse index, I selected the closing price of every last day of the trading week i.e. Friday
For arriving at the last day of the week I applied the formula =Weekday (cell value,2) then it returns the days signifying: 1 for Monday 2 for Tuesday likewise 6 for Friday, I kept only the no 6 denoting Friday and deleted the rest useless data for the purpose.
On performing the above-mentioned procedure, we are left with three columns first being date column 2nd being closing prices of the stock and 3rd being closing price of the BSE index.
Now we will calculate the corresponding return for each week from the stocks by applying the formula = {(Closing value – Opening Value)/ Opening Value*100}.
Formula used;
or calculation of Beta = COVARIANCE ( RETURN ON STOCK,RETURN ON MARKET INDEX)/VARIANCE OF MARKET)
Beta= COV(Ri, Rm)
VAR (Market)
={Ri – Mean of Ri}{Rm- Mean of Rm}/No of items
{(Rm- mean of Rm )^2}/No of items
Hence on making the above calculations we get the beta for the company = 0.6263 which is less than 1, that indicates that the company is less volatile in nature hence it is suitable for long term investments.
By applying the anova on the above data obtained we obtained the correlation between the stock and market return .26506 which indicates there is positive relation between the movement of price of stock and market movements. Similarly we obtained the F value and P value to be 2.654 and .682 respectively.