Title: Relationship of Nifty 50 with Paras Defense & Space Technologies Ltd.
Author: Prajwal Tapaswi
Introduction: Paras Defense and Space Technologies Limited is an Indian company specializing in defense and space electronics systems. Established in 2009, the company has rapidly emerged as a key player in the defense and aerospace sectors. Paras Defense is known for its expertise in designing, developing, manufacturing, and testing a wide range of defense electronics and communication systems.
Objective: To find out Beta of Paras Defense & Space Technologies Ltd & its significance.
Data Collection: The data for Nifty 50 & Paras Defense & Space Technologies Ltd has been extracted from nsendia.com for the period 01-02-23 to 31-01-24. Weekly closing prices were found out, weekly returns were calculated. Weekly returns of Paras Defense & Space Technologies were regressed on weekly returns of Nifty 50
Data Analysis: Paras Defense & Space Technologies=0.314-0.931Nifty 50
n=48, R^2=0. 0904, F=4.575, P-Value=0.03
The above equation shows the relationship between weekly return of Nifty 50 and Paras Defense & Space Technologies Ltd. The positive sign means there is direct relationship if weekly return of Nifty 50 rises, then weekly return of Paras Defense & Space Technologies Ltd will rise by 0.931 units and vice versa. T-stat for β is 2.13 and p-value for which is 0.03 which is less than 0.05 meaning β is statistically significant at 5% level. Number of observations are 48, R^2 is 0.0904 meaning 9.04% Paras Defense & Space Technologies is explained by Nifty 50, balance 90.96% is error due to variables not taken into the model, F is 4.575, p-value of which is 0.03 which is less than 0.05, so the overall model is statistically significant.
Conclusion: The beta is more than 1, Paras Defense & Space Technologies is good for short- term investment.