Title: – Relationship of “State Bank of India” with Nifty 50
Author: – Sahil Ramesh Kawale (02133012036)
Introduction: – SBIN (STATE BANK OF INDIA) saw significant fluctuations, influenced by macroeconomic factors and banking sector trends. The stock generally trended upward, reflecting improved financial performance, strong loan growth, and better asset quality. However, it also experienced periods of volatility due to changing interest rates and regulatory developments. Overall, investors noted a positive trajectory, with many analysts optimistic about its long-term prospects.
Objective: – To find out Beta of STATE BANK OF INDIA and its significance.
Data Collection: – Data of nifty 50 & STATE BAK OF INDIA is downloaded from NSE official website for the period of 1st April 2023 to 31st march 2024. Data was manipulated for Friday closing prices & weekly returns were calculated by formula (Yt-1 – Yt) / Yt x 100. Weekly returns of State bank of India were regress on weekly return of Nifty 50.
Data Analysis: –
Weekly return of State Bank of India = 0.14 + 1.21 * weekly returns of Nifty 50
(3.7096)
N= 46, R square = 0. 238, F = 13.761, P value = 0.0005
Above equation shows the relations between Nifty 50 & State Bank of India . The Positive sign before 1.21, positive sign means if nifty rises, State bank of India will also rise and vice versa.
The coefficient of Nifty 50 has T stat = 3.7096 & P value of which is 0.0005, it is less than 0.05 which means it is statically significant to increase the price of State bank of India.
R Square is 0.238 meaning 23.8% of State bank of India price are explained by nifty 50 & 76.2 % depends upon factors like fundamentals & other factors.
F is 13.761 & P value for this is 0.0005 meaning it is less than 0.05 which means it is statically significant.
Conclusion: –
Beta value is 1.21 which is more than 1 & positive, means it is good for short term investment if nifty is at bottom.