Relationship of Kotak Mahindra bank Ltd
Author : Krupa Nimbalkar
Introduction
Kotak Mahindra Bank Limited is an Indian banking and financial services company headquartered in Mumbai. It offers banking products and financial services for corporate and retail customers in the areas of personal finance, investment banking, life insurance, and wealth management. It is India’s third largest private sector bank by capitalisation.
Objectives
To find out β and find its significance
Data collection
Data for Nifty 50 and Kotak Mahindra Bank Ltd has been downloaded from NSE side from 1-3-2023 to 28-2-24 weekly closing prices were found, weekly returns were calculated, weekly Kotak Mahindra bank ltd were regressed on weekly returns on Nifty 50
Data Analysis
Kotak Mahindra Bank Ltd(1574.556007+0.007113379)
Format of regression equation is Y=a+β(x)
Equation of regression of weekly returns of Kotak Mahindra Bank Ltd on weekly returns of Nifty 50 index
Weekly returns of Kotak Mahindra Bank Ltd Y=1574.55+0.007 weekly returns of Nifty50 (0.86)
Where,
Number of Observation=49
R square=0.016
F value=0.749009
P value=0.39128
t stat=0.8654
Interpretation:
The above equation shows the relation between weekly returns of Nifty 50 and Kotak Mahindra Bank Ltd. Positive sign means direct relationship, if weekly returns of Nifty 50 rises weekly returns of Kotak Mahindra Bank Ltd rises and vice versa.
If weekly returns of Nifty 50 rises by 1 unit Weekly returns of Kotak Mahindra Bank Ltd will rise by 0.0071 units vice versa.
Tstat for b is given in bracket and the p value for this is 0.39 which is more than 0.05 meaning b is not statistically significant at 5% level meaning weekly returns of Nifty 50 does not play a significant role for demand number of observations are 48 R square is 0.016 meaning 1.6% of weekly returns of Kotak Mahindra Bank Ltd is explained by weekly returns of Nifty 50 balance 98.4 is error due to the variables not taken in the model F=0.749008 the p value is 0.39 which is more than 0.05 overall the model is not statistically significant.
Conclusion:
Hence, beta is less than 1 this company is good for long term.