Relationship Between Nykaa with Nifty-50
Author: Nikhita Shelke
Introduction:
Nykaa is a BSE and NSE listed company primarily Nykaa is a leading beauty and wellness platform. The company offers a wide range of beauty, skincare, haircare, and wellness products from leading brands, as well as its own in-house beauty products. Nykaa has become a one-stop destination for all beauty needs, with products ranging from makeup to skincare, haircare, fragrances, and personal care items. The company has gained a strong foothold in the market through its user-friendly website, mobile app, and offline stores, offering customers a seamless shopping experience. Nykaa has become a household name in the beauty industry, known for its diverse product range, quality customer service, and innovative marketing strategies.
Objective: To calculate Beta and find its significance.
Data Collection:
Data for NIFTY 50 and was downloaded from NSE site for the period 01.03.2023 to 28.02.2024. Friday closing prices were calculated and weekly returns of Nykaa were regressed on weekly returns of Nifty 50.
Data Analysis:
Equation: Y= α + βX
Weekly returns of Nykaa = -0.169+0.804 Nifty 50
Where,
Number of observations: 47
R Square: 0.051
F: 2.434
P-value: 0.126
Interpretation:
The above equation shows the relationship between NIFTY 50 and Nykaa
Negative sign means inverse relationship. If weekly returns of NIFTY 50 rises, weekly returns of Nykaa falls, and vice-versa.
If a weekly returns of NIFTY 50 rises by 1 unit, weekly returns of Nykaa will fall by 0.804 units and vice-versa.
T-stat for b Is given in Bracket and P value for this is 0.126, 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 Nykaa
Number of observation are 47, R square is 0.051 meaning 5.1% of Nykaa is explained by NIFTY 50. Balanced 94.9% is error due to variables not taken in the model.
F is 2.434, the P value for which is 0.126
Conclusion:
As β (0.804) is less than 1, It is good to invest in Nykaa for long term.
