Title: Relationship between Nifty50 and Siemens
Author:
Sakshi Pramod Warulkar
Roll no: 010018
Introduction:
Siemens is a global powerhouse focusing on the areas of electrification, automation, and digitalization. With a rich history spanning over 170 years, Siemens is committed to driving progress through innovative technologies and solutions that improve the quality of life for people worldwide. From energy-efficient infrastructure to cutting-edge healthcare systems and sustainable mobility solutions, Siemens continues to be a leading force in shaping the future of industry and society.
Objective:
To calculate beta and its significance
Literature Review :
The study conducted by Kumar and Gupta (2019) aimed to analyze the risk and return of selected sectoral indices from the National Stock Exchange (NSE), with a specific focus on the financial services and pharmaceutical sectors. The research utilized an exploratory research design, with secondary data collected from sources such as NSE India.
Ambashtha and Singh (2020) write in their study about investigating stock market integration among major global exchanges. This study focuses on short-run and long-run relationships, particularly between the Indian stock market and developed markets like the USA, France, and Germany. It suggests potential gains from international diversification.
Data Collection:
The data has been downloaded from NSE website for the period 27-02-2023 to 27-02-2024 for stock closing prices of Nifty50 and Siemens. The data has been manipulated to get Friday closing prices of Nifty50 and Siemens.
Data Analysis :
Y was regressed on X
Y= a + bX
Y= -0.413 – 0.0.608X
N= 48
R Squared =0.072
F =3.571
P value = 0.065
The above equation shows the relationship between Nifty 50 and Siemens .Return of Siemens is dependent variable and Return of Nifty 50 is independent variable. It shows relationship between Nifty 50 and Siemens. Number of observations is 48.t-stat is calculated as 1.890. Beta is calculated as -0.608.
P-value is calculated to be 0.065, which is higher than the conventional significance level of 0.05. So it is not statistically significant at the 5% level.
The R-squared value is 0.072, indicating that approximately 7.20% of the variance in Y is explained by the X. The remaining 92.80% of the variance is attributed to other factors not included in the model.
The F is 3.57, indicating that the overall model is statistically significant.
Conclusion :
The beta is less than 1, therefore, it would be good to invest in Siemens for long-term.
References :
Ambashtha, Dr. K., & Singh, M. (2020). Comparative Technical Analysis and Prediction of Nifty-50 Performance.
Samadder, S., & Bhunia, A. (2018). Integration between Indian stock market and developed stock markets.