Title: Relationship between Nestle India with Nifty50.
Author: Nisha Kharat.
Introduction:
Nestlé India is a leading food and beverage company in India. It offers a wide range of products like Maggi noodles, KitKat chocolates, and Nescafé coffee. Established in 1959, Nestlé India has become a household name known for its quality and taste. The company is committed to nutrition, health, and wellness, aiming to provide tasty and nutritious food options to consumers. With a strong presence across the country, Nestlé India continues to innovate and delight customers with its diverse product portfolio.
Objective: To calculate beta and its significance.
Data Collection:
Data for Nifty 50 and Nestle India has been downloaded from NSE website for Period of 1stMarch 2023 to 28th February 2024, Friday closing prices were calculated and weekly returns was found out. Weekly Returns of Asian Paints were regressed on weekly returns of Nifty 50.
Data Analysis:
Equation of Nestle India = 0.484 – 0.00048x
Interpretation- The above equation shows relationship of Nestle India and Nifty 50. Positive sign means direct relationship, if Nifty 50 raise then the return of Nestle India raise and vice versa.
If Nifty 50 raise by 1 unit, return of Nestle India will rise by 0.00048 units and vice versa. T-stat for b is -0.314 and the p value is 0.754 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 return of Nestle India.
Numbers of observations are 50.
R-square is 0.00205, meaning 0.01% of returns of Nestle India share is explained by Nifty 50 balance 99.99% is error due to the variables not taken in the model.
F is 0.098, the P value for which is 0.754 which is more than 0.05. So the overall model is not statistically significant.
Conclusion:
As beta = 0.00048, is less than 1, therefore company is good for long term investment.