Relationship of Glenmark Pharmaceuticals With Nifty-50
Authors: Gaurav Chopade.
Introduction:
Glenmark Pharmaceuticals, a key player in India’s pharmaceutical industry, shares an intricate relationship with the Nifty-50 index, reflecting its significance within the stock market ecosystem. As a leading pharmaceutical company, Glenmark’s ahperformance and market movements often influence the sentiment and dynamics of the Nifty-50. Its innovative research, diverse portfolio of medications, and global presence contribute to its impact on the broader market. Understanding Glenmark’s correlation with the Nifty-50 provides valuable insights into both the pharmaceutical sector’s trends and the overall market sentiment.
Objective: To calculate β (Beta) & find its significance.
Data Collection:
Data for NIFTY 50 and Glenmark Pharmaceuticals was downloaded from NSE website from period “1/3/2023 – 28/2/2024”.Friday closing prices were calculated and weekly returns were found out .Weekly returns of Glenmark Pharmaceuticals were regressed on NIFTY 50 .
Data Analysis:
EQUATION : Glenmark Pharma = -1.387215364 – 0.227970451* (NIFTY 50) (t-stats=-2.07286)
N =48 , R-Square = 0.005156127 , f = 0.238411 , p-value = 0.043815
INTERPRETATION :
The above equation shows the relationship between Glenmark Pharmaceuticals and Nifty-50. A negative coefficient suggests an inverse relationship between Glenmark Pharma’s performance and the Nifty-50 index and vice versa . If nifty-50 price rises by 1 unit then Glenmark Pharmaceuticals price will decrease 0.227970451 units and vice versa . t-stat for ‘b’ is given in bracket and the p-value for this is 0.043815 which is less than 0.05 meaning b is statistically significant at 5% level of significance meaning Glenmark’s price does play a significant role for price of Nifty-50. Number of observations are 48, R-square is 0.005156127 meaning that 51% Glenmark Pharmaceuticals price explained by price of nifty -50 ,balance 49% is error due to the variables not taken in the model. F is 0.238411 the p – value for which 0.043815 which is not more than 0.05 so overall the model is statistically significant.
Conclusion:
As β =0.227970451, is less than 1, therefore company is good for long term investment.