Relationship of Maharashtra Bank with nifty 50

TITLE: -Relationship of maharashtra bank with Nifty 50

AUTHOR: – Mohamad Shakeeb Khan MMS-B (87)

INTRODUCTION: – This project is about whether maharashtra bank is good for short term or long-term investments, in comparison with NIFTY 50. Maharashtra bank is an Indian public sector bank headquartered in Pune. The bank was founded by V.G.Kale and D. K. Sathe & 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 maharashtra bank was downloaded from NSE website for the period 1-2-23 to 31-1-24. Friday closing prices were calculated and weekly returns of maharashtra bank were regressed on weekly returns of NIFTY 50.

DATA ANALYSIS:

Equation: Maharashtra bank Y=−0.95−0.30X NIFTY50

N=48; R2= 0.006564; F= 0.303935; P value = 0.584094; t-stats for b = -0.5513

The above equation shows the relationship between NIFTY 50 and Bank of Maharashtra. The regression analysis reveals a weak negative relationship between Bank of Maharashtra (Y) and NIFTY50 (X), as indicated by the coefficient of -0.30. However, this relationship is not statistically significant, with a high p-value of 0.584094 suggesting that changes in NIFTY50 do not reliably predict changes in maharashtra bank stock. The model’s overall explanatory power is extremely low, with an R-squared of 0.006564, indicating that only about 0.65% of the variation in Bank of Maharashtra can be explained by fluctuations in NIFTY50. Furthermore, the t-statistic for the coefficient (-0.5513) is below the threshold for significance, reinforcing the lack of meaningful association between the two variables. With these results, it’s evident that NIFTY50 movements are not a strong predictor of maharashtra bank stock performance.

 

CONCLUSION: Beta is -0.298760708 which is less than 1 therefore maharashtra bank is good for long term investment.

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