Relationship between Shree Cement Limited with Nifty50.

Title: Relationship between Shree Cement limited with Nifty50.

 

Author: Shehzad Ghori

Introduction: – 

Shree Cement Limited is a Shree Cement owns and operates cement grinding units in

Suratgarh, Bulandshahr, Khushkhera, Roorkee, Panipat, Aurangabad, Saraikela, Cuttack, and Jaipur. The company markets cement through dealers, retailers, and sales offices. It owns cement production facilities in Rajasthan, Chhattisgarh, and Karnataka. The company carries out power generation through waste heat recovery plants. The company, through its subsidiary, has operations in India and the United Arab Emirates. Shree Cement is headquartered in Kolkata, West Bengal, India.

Objective

To calculate beta of and find it’s significance Data Collection:

Data for NIFTY 50 and Shree Cement limited has been downloaded from NSE website for Period of 1st March 2023 to 28th February 2024, Friday closing prices were calculated and weekly returns was found out. Weekly Returns of Shree Cement limited were regressed on weekly returns on NIFTY 50.

Data Analysis:

Format of regression equation is Y= α + β(X)

Equation of regression of weekly returns of Data patterns India ltd on weekly returns of nifty50 index –

Where,

Number of observations: 48,

R square = 0.039747337,

F = 1.9040587790, P-value = 0.1742951 Interpretation:

  • The above equation shows relationship between weekly returns of Shree cement Limited Company and weekly returns of Nifty 50 Index.
  • Positive sign means direct relation, meaning if weekly returns of Nifty 50 Index rise then weekly returns of Shree cement Limited Company also rises and vice-versa.
  • If weekly returns of Nifty 50 Index rise by 1-unit, weekly returns of Shree cement Limited Company will rise by 0.783458245 unit and vice-versa.
  • Figure in bracket shows t-stat for β, P-value for which is 0.1742951, which is greater than

0.05 meaning β is not statistically significant at 5% significance level.

  • Number of Observations are 48, R-square value is 0.039747337 meaning approximately

3.97% of weekly returns of Shree cement Limited are explained by weekly returns of Nifty 50 Index. Balance 96.03 (approximate) is error due to other variables which are not in the model.

  • F is1.9040587790, the P-value of which is 0.1742951, which is more than 0.05 meaning overall, the model is not statistically significant at 5% significance level. Conclusion: –

As beta =0.46021 , is less than 1, therefore company is good for long term investment

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