Relationship of nifty with Orient Cement
Author: Onkar Ravindra Korpe -93
Introduction:
India’s well-known cement company, orient cement, was Established in 1979, Orient Cement was formerly, a part of Orient Paper & Industries. It was demerged in the year 2012 and since then, it has emerged as one of the fastest growing and leading cement manufacturers in India. Orient Cement began cement production in the year 1982 at Devapur in Adilabad District, Telangana. In 1997, a split-grinding unit was added at Nashirabad in Jalgaon, Maharashtra. In 2015, Orient Cement started commercial production at its integrated cement plant located at Chittapur, Gulbarga, Karnataka. With a total capacity of 8.5 MTPA, they serve Maharashtra, Telangana, Andhra Pradesh, Karnataka and parts of Madhya Pradesh, Tamil Nadu, Kerala, Gujarat and Chhattisgarh.
Objective: To find out Beta of Orient Cement and its significant.
Data Collection: Data of Nifty fifty and Orient Cement has been downloaded from NSE (National Stock Exchange) side which is NSEINDIA.COM for the period of 01/02/2023 to 31/01/2024. Weekly Closing prices were found out weekly returned calculated. Weekly returns of Orient Cement were regress of weekly returns of nifty.
Data Analysis:
Equation of regression of weekly returns of orient cement on weekly returns of nifty fifty.
Format of regression equation is Y= a + β(X)
Weekly returns of Orient Cement = 1.51461265851946 + 0.801986933648362 * weekly returns of nifty fifty (1.39938672618763)
Where,
Number of observations is 48,
R Square is = 0.0408330548630868,
F = 1.95828320943012,
P-Value = 0.168404613195199,
Interpretation:
The above Equation shows the relationship between weekly returns of Orient Cement and Nifty Fifty Index.
The Positive sign means there is direct relationship. If price increases Demand also increases and vice versa. By One Unit increases Demand will be increases by 0.801Unit & vice versa.
The value inside bracket is t-stat for b, the P-value for which is 0.168404613195 which is less than 0.05 meaning b is statistically significant at 5% level.
Number of observations is 48, R-square value is 0.0408330548630868 Means approximately 4% of weekly returns of orient cement are explained by weekly returns of nifty fifty index. Balance 96% is error due to other variables which are not in the model.
F is 1.95828320943012 the P-value of which is 0.168404613195 which is more than 0.05 meaning overall the model is statistically significant at 5% level.
Conclusion:
As Beta is (0.801986933648362) is less then 1. It is good to invest in orient cement for long term