Title: Relationship between Star Health & Allied Insurance Co. Ltd with Nifty 50.
Author: Shruti Bansode
Introduction: Star Health & Allied Insurance Co. Ltd. is India’s leading private health insurance provider, established in 2006. With a vast network of over 14,000 hospitals and 850+ branches, we have served over 17 crore lives with Rs. 30,300 crore in paid claims. Our innovative products and services cater to individuals, families, and corporates, backed by a dedicated 24×7 multilingual call center and digital solutions for seamless customer experiences.Objective: To calculate beta and its significance.
Data Collection: Data for Nifty 50 and Star Health & Allied Insurance Co. Ltd 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 Star Health & Allied Insurance Co. Ltd were regressed on weekly returns of Nifty 50.
Data Analysis: Equation of Star Health & Allied Insurance Co. Ltd share = -0.094 + 0.36x
Interpretation- The above equation shows relationship of Star Health & Allied Insurance Co. Ltd and Nifty 50. Positive sign means Direct relationship, if Nifty 50 Rise then the return of Star Health & Allied Insurance Co. Ltd Rise and vice versa. If Nifty 50 falls by 1 unit, return of Star Health & Allied Insurance Co. Ltd will rise by 0.36 units vice versa. T-stat for b is 0.80 and the p value is 0.42 which is more than 0.05, meaning b is not statistically significant at 5% level, meaning Nifty 50 does not play a significant role for return of Star Health & Allied Insurance Co. Ltd. Numbers of observations are 48. R-square is 0.014, meaning 0.01% of returns of Star Health & Allied Insurance Co. Ltd share is explained by Nifty 50 balance 99.99% is error due to the variables not taken in the model. F is 0.065, the P value for which is 0.42 which is more than 0.05. So the overall model is not statistically significant.
Conclusion: As beta = 0.36, is less than 1, therefore company is good for long term investment.