Relationship of Muthoot finance with nifty 50
Author: Manish Gautam
Batch: F1
Roll No: 21230023922
Introduction:
Muthoot Finance Limited is an Indian financial corporation that specializes in providing a wide range of financial services, with a primary focus on gold loans. The company was founded in 1939 by M. George Muthoot and is headquartered in Kochi, Kerala, India. Over the years, Muthoot Finance has grown to become one of the largest and most prominent non-banking financial companies (NBFCs) in India.
Here is an introduction to Muthoot Finance in financial terms:
Nature of Business
- Gold Loan Business
- Branch Network
- Diversification of Services
- NBFC Status
Objective:
To determine Muthoot Finance Limited beta and analyze its significance.
Data collection:
Data for this period (01.12.2022 to 30.11.2023) was obtained from the NSE India website and Weekly Closing Prices. Where discovered, weekly Nifty returns, and weekly Muthoot Finance Limited returns were calculated (Nifty returns as X and equity returns as Y) Y was a regression on X.
Data Analyses
The regression equation is typically represented as:
Y=β0+β1X+ε
Where
- Y is the dependent variable
- X is the independent variable
- β0 is the intercept
- β1 is the coefficient for the independent variable
- ε is the error term.
From your provided statistics, the coefficients are as follows:
- Intercept (β0): 0.00645709
- Coefficient for the independent variable (β1): 0.00502356
Therefore, the regression equation is: Y=0.00645709+0.00502356X+ε Additionally, the statistics table provides the t-statistic for β0 and β1, as well as their corresponding p-values. The t-statistic is used to test the hypothesis that the corresponding coefficient is equal to zero. The p-value represents the probability of observing a t-statistic as extreme as the one computed from the sample, assuming that the null hypothesis is true.
For β0:
- t Stat: 1.385897256
- P-value: 0.172319211
For β1:
- t Stat: 0.032447155
- P-value: 0.388548272
Conclusion:
In both cases, the p-values are higher than the common significance level of 0.05. Therefore, we fail to reject the null hypothesis that the corresponding coefficients are equal to zero.
References:
https://www.nseindia.com/market-data/securities-available-for-trading