Title: Relationship of South Indian Bank with Nifty50.
Author: Sarthak Paul(Roll no. : 21230023137)
Intro: South Indian Bank was registered in 1929 under the Companies Act. It commenced business on 29 January 1929 at Round South, Thrissur. It was included in the second schedule of the Reserve Bank of India and became a scheduled Bank on 7 August 1946. SIB was the first scheduled Bank in the private sector in Kerala to get the license under Section 22 of the Banking Regulation Act, 1949 from the RBI on 17 June 1957.The Bank has won the ‘UiPath Automation Excellence Awards 2021’ for Best Automation under crisis for business continuity.
Objective: To calculate Beta and its significance.
Views and Reviews: South Indian Bank has TTM P/E ratio 6.22 as compared to the sector P/E of 8.78. There are 4 analysts who have initiated coverage on South Indian Bank. There are 2 analysts who have given it a strong buy rating & 0 analysts have given it a buy rating. 0 analysts have given the stock a sell rating.
Data collection: Nifty and South Indian Bank’s closing price was collected from NSE website and Yahoo finance. Weekly return of Nifty is termed as “X” and weekly return of South Indian Bank is termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y= (-0.01201) +( -1.71433)*(x)
Interpretation:
The above equation shows the relation between Nifty50 and South Indian Bank.
Return of South Indian Bank is dependent variable and return of Nifty50 is independent variable.
Negative sign means if Nifty50 rises by 1 unit then share price of South Indian Bank will also Fall by 0.11 and vice-versa
Number of observations are 48
3.74 is the t-stat for Y, the p-value for which is 0.02087289.
R square is 0.11 which means 11% of variances in South Indian Bank are explained by Nifty.
Here the standard error is 6.9%. This is happened due to the variable which are not in the model.
Here F value is the 4.313194 and the P value is 0.0433 which means overall model is statistically significant at 1% significant level.
Conclusion: Beta is which is less than 1, it means that South Indian Bank is good for long term investment.
Reference:
https://www.livemint.com/market/market-stats/stocks-south-indian-bank-share-price-nse-bse-s0003300
https://en.wikipedia.org/wiki/South_Indian_Bank