Title: Relationship between JSW Steel with Nifty50.
Author: Juili Dhule (MMS A – rollno. 10)
Introduction:
JSW Steel has always been at the forefront of research and innovation. Through a strategic partnership with world-renowned JFE Steel of Japan, JSW is able to access cutting-edge technology and create and provide its clients with high-value special steel products. These items are widely employed in many different sectors and applications, such as infrastructure development, automotive manufacturing, electrical applications, appliances, etc. Many people acknowledge JSW Steel for its superior business and sustainability policies. Since 2008, World Steel Dynamics has placed JSW Steel as the only Indian business among the top 15 worldwide producers of steel for 13 years running. JSW Steel’s carbon reduction objectives are in line with India’s climate change obligations made under the Paris Accord as a responsible corporate citizen.
Objective: To calculate Beta and find its significance.
Data Collection:
Data for Nifty 50 and JSW Steel has been downloaded from NSE website for Period of 1st March 2023 to 28th February 2024, Friday closing Nifty 50s were calculated and weekly returns was found out. Weekly Returns of JSW Steel were regressed on weekly returns on Nifty 50.
Data Analysis:
Equation:
JSW Steel share= -0.167 – 0.364x
Interpretation:
The above equation shows relationship of JSW Steel and Nifty 50. Negative sign means inverse relationship, if Nifty 50 rises return of JSW Steel falls.
If Nifty 50 rises by 1 unit, return of JSW Steel will fall by 0.364 units vice versa.
T-stat for b is -1.238 and the p value is 0.221 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 JSW Steel.
Numbers of observations are 48.
R-square is 0.032, meaning 0.03% of return of JSW Steel share is explained by the Nifty 50 balance 99.97% is error due to the variables not taken in the model.
F is 1.534, the P value for which is 0.221 which is more than 0.05 so the overall model is not statistically significant.
Conclusion:
As beta = -0.364, is less than 1, therefore company is good for long term investment.