TITLE: Relationship of Nifty with National Thermal Power Corporation
AUTHOR: NIKITA DUBEY (MMS 2023-2025)
INTRODUCTION: This report is about the relationship of Nifty 50 with respect to National Thermal Power Corporation Company. The data for this report is collected from NSE website. National Thermal Power Corporation Limited formely known as National Thermal Power Corporation is an , Indian Central Public sector undertaking (PSU) under the ownership of the government of India.NTPC is India’s largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India
OBJECTIVE: To find out beta of National Thermal Power Corporation
and its significance
DATA COLLECTION: Data for Nifty 50 and National Thermal Power Corporation has been downloaded from NSE.idea.com for the period 1-2-23 to 31-1-24 weekly closing prices were found weekly returns to calculate weekly return of SBI were regressed on weekly return on nifty 50.
DATA ANALYSIS: Format of Regression equation is Y=a+B(X)
Equation of regression of weekly returns of National Thermal Power Corporation on weekly returns of Nifty 50 Index + weekly returns of National Thermal Power Corporation = -1.31510 + 0.1542 X weekly returns of Nifty 50 Index
where,
Number of observations=48
R square =0.00663,
F=0.30738
p-value=0.58199
Interpretation:
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The above equation shows relationship between weekly returns of National Thermal power corporation and weekly returns of Nifty 50 Index
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Positive sign means direct relation, meaning if weekly returns of Nifty 50 index rise then weekly returns of National Thermal Power Corporation Company also rise and vice versa
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If weekly returns of Nifty 50 Index rise by 1- unit , weekly returns of Natinal Thermal Power Corporation company will rise 0.1542 by unit and vice-versa
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Figure in bracket shows t-stat for B, P-value for which is 0.5820 , which is greater than 0.05 meaning 1 is not statistically significant at 5% significance level.
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Number of observations are 48, R- square value is 0.006663 meaning 0.6% of weekly returns of National Thermal Power Corpation are explained by weekly returns of Nifty 50 Index. Balance 99.4% is error due to other variables which are not in the model.
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F is 0.30738 , the P-value of which is = 0.58199, which is more than 0.05 meaning overall , the model is not statistically significant at 5% significance.
CONCLUSION: As Beta value is 0.1542 is less than 1, National Thermal Power Corporation Company is good to invest for long term