Title:- Relationship of Samsung with Nifty 50
Author:- Sadhana Pradhan
Intro:- Samsung was founded as a grocery trading store on March 1, 1938, by Lee Byung-Chull. He started his business in Taegu, Korea, trading noodles and other goods produced in and around the city and exporting them to China and its provinces. (The company name, Samsung, came from the Korean for “three stars.”) After the Korean War, Lee expanded his business into textiles and opened the largest woolen mill in Korea. He focused heavily on industrialization with the goal of helping his country redevelop itself after the war. During that period his business benefited from the new protectionist policies adopted by the Korean government, whose aim was to help large domestic conglomerates (chaebol) by shielding them from competition and providing them easy financing. In the late 1950s the company acquired three of Korea’s largest commercial banks as well as an insurance company and firms that made cement and fertilizer. Samsung in the 1960s acquired more insurance companies as well as an oil refinery, a nylon company, and a department store.
During the 1970s the company expanded its textile-manufacturing processes to cover the full line of production—from raw materials all the way to the end product—to better compete in the textile industry. New subsidiaries such as Samsung Heavy Industries, Samsung Shipbuilding, and Samsung Precision Company (Samsung Techwin) were established. Also, during the same period, the company started to invest in the heavy, chemical, and petrochemical industries, providing the company a promising growth path.
Objective:– To calculate Beta and its significance.
View and Review:- Samsung Electronics inspires the world and shapes the future with transformative ideas and technologies. The company is redefining the worlds of TVs, smartphones, wearable devices, tablets, digital appliances, network systems, and memory, system LSI, foundry and LED solutions.
To strengthen synergies among the diverse businesses and create differentiated products and services, Samsung operates under two core divisions: DX (Device eXperience), which includes businesses for Visual Display, Digital Appliances, Mobile eXperience, Networks, and Health & Medical Equipment; and DS (Device Solutions), which consists of Memory, System LSI, and Foundry businesses.
Since Samsung’s founding in 1969, the company has followed a clear business philosophy: to devote its talent and technology to creating superior products and services that contribute to a better global society. To achieve this, Samsung sets a high value on its people and technologies.
Samsung is committed to sustainable and responsible business operations. Samsung has committed to achieving net zero emissions enterprise-wide by 2050 and using more renewable energy, and to strategically invest in new sustainable technologies to create a better, healthier planet for all. Samsung is also committed to empowering the next generation to achieve their full potential and pioneer positive social changes under its CSR vision of ‘Together for Tomorrow! Enabling People.’
Data collection: Nifty and Samsung’s closing price was collected from Yahoo Finance website. Weekly return of Nifty is termed as “X” and weekly return of Samsung 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=0.1514+1.6195x
Interpretation:
The above equation shows the relation between Nifty50 and Samsung.
Return of Samsung is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of Samsung will also rise by 0.23 and vice-versa.
Number of observations are 50.
22.14962968 is the t-stat for Y, the p-value for which is 0.392484682.
R square is which 0.015601272 means 15% of variances in Samsung are explained by Nifty.
F is 0.744880896, p-value for this is 0.392484682 which means model is statistically significant at 1% level.
Conclusion: Beta is 0.1514 which is less than 1, it means that Samsung is good for long term investment.
Reference:
https://finance.yahoo.com/
https://www.irjmets.com/uploadedfiles/paper//issue_4_april_2023/37523/final/fin_irjmets1683024790.pdf