Author: Swapnil S Mishra
Introduction: Starbucks is an American company that operates the largest coffeehouse chain and one of the most recognizable brands in the world. Headquartered in Seattle, Washington, the company operates more than 35,000 stores across 80 countries
Objective: To calculate Beta and find its significance
Data collection: Data for Nifty 50 and Starbucks Corp was downloaded from NSE site for the period 01-03-2023 to 28-02-2024. Friday closing prices were calculated and weekly returns were found out. Weekly returns of Starbucks Corp were regressed on weekly returns Nifty 50.
Data analysis: Starbucks Corp =-0.37114 + 0.409914 Nifty 50 returns
T-stat = (-0.65927)
n= 44
R2 =0.024494
F=1.054574
P value=0.513319
Interpretation: The above equation shows the returns between Nifty50 and Starbucks Corp Negative sign shows Inverse relationship, if returns of nifty 50 increases, the returns of Starbucks Corp decreases and vice versa. If nifty 50 returns increase by 1 unit, Starbucks Corp returns decreases by 0.41 units and vice versa. T stat for b is given in brackets as -0.65927 and p value for this is 0.513319 which is more than 0.05 meaning Nifty 50 is not statistically significant at 5% level meaning Nifty 50 return does not play a significant role for Starbucks Corp return. Number of observations are 44. R2 is 0.024494 meaning 2% of Starbucks Corp returns is explained by Nifty 50 returns. Balance 98% is error due to the variable not taken in the model. F value is 1.054574, P value for which is 0.513319 which is more than 0.05. So, the overall model is not statistically significant.
Conclusion: Beta is 0.409914 which is less than 1, so Starbucks CORP is good for long term Investment.