Title: Relationship between Asian Paints with Nifty 50.
Author: Ashvini Ahire (Roll no : 02)
Introduction:
Asian Paints has come a long way since its small beginnings in 1942. The Asian Paints group has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 15 countries and has 27 paint manufacturing facilities in the world servicing consumers in over 60 countries. Asian Paints manufactures a wide range of paints for decorative and industrial use and also offers Wall Coverings, water proofing, adhesives and services under its portfolio.
Objective: To calculate beta and its significance.
Data Collection:
Data for Nifty 50 and Asian Paints has been downloaded from NSE website for Period of 1st March 2023 to 28th February 2024, Friday closing prices were calculated and weekly returns was found out. Weekly Returns of Asian Paints were regressed on weekly returns of Nifty 50.
Data Analysis:
Equation of Asian Paints share = -0.181 + 0.206x
Interpretation- The above equation shows relationship of Asian Paints and Nifty 50. Negative sign means inverse relationship, if Nifty 50 falls then the return of Asian paints falls and vice versa.
If Nifty 50 falls by 1 unit, return of Asian Paints will rise by 0.206 units vice versa.
T-stat for b is 0.724 and the p value is 0.472 which is more than 0.05, meaning b is not statistically significant at 5% level, meaning Nifty 50 does not play a significant role for return of Asian Paints.
Numbers of observations are 48.
R-square is 0.011, meaning 0.01% of returns of Asian Paints share is explained by Nifty 50 balance 99.99% is error due to the variables not taken in the model.
F is 0.524, the P value for which is 0.472 which is more than 0.05. So the overall model is not statistically significant.
Conclusion:
As beta = 0.206, is less than 1, therefore company is good for long term investment.