AUTHOR: – Muhriz Shaikh MMS-B (111)
INTRODUCTION: – This project is about whether Moil Ltd.is good for short term or long-term investments, in comparison with NIFTY 50. Moil Ltd. is a leading manganese ore mining company headquartered in Nagpur, India. The company is managed by a Board of Directors nominated by the Govt. of India and the State Governments of Maharashtra and Madhya Pradesh & Nifty 50 represents the weighted average of 50 of the largest Indian Companies listed on the National Stock Exchange.
Objective: – To calculate beta and find its significance.
DATA COLLECTION: Data for NIFTY 50 and Moil. Ltd was downloaded from NSE website for the period 1-2-23 to 31-1-24. Friday closing prices were calculated and weekly returns of Moil. Ltd were regressed on weekly returns of NIFTY 50.
DATA ANALYSIS:
Equation: Moil Ltd. Y=−1.14−0.65X NIFTY50
N=48; R2=0.034022; F= 1.62012; P value =0.209471; t-stats for b = -1.27284
The above equation shows the relationship between NIFTY 50 and Moil Ltd. The data analysis reveals a weak negative linear relationship between Moil Ltd. stock returns and NIFTY 50 index, with an intercept of -1.14 and a slope of -0.65. The coefficient of determination (R-squared) indicates that only approximately 3.4% of the variability in Moil Ltd. returns can be explained by changes in the NIFTY 50 index. The F-statistic of 1.62012 with a corresponding p-value of 0.209471 suggests that the regression model is not statistically significant at conventional levels of significance, indicating that the model may not provide a good fit to the data. The t-statistic for the slope coefficient, -1.27284, indicates that it is not significantly different from zero, further questioning the strength of the relationship between Moil Ltd. returns and the NIFTY 50 index. Overall, based on this analysis, it appears that NIFTY 50 movements have limited explanatory power for changes in Moil Ltd. stock returns.
CONCLUSION: Beta is -0.64578 which is less than 1 therefore Moil Ltd. is good for long term investment.