Title: Company Pfizer’s relationship with NIFTY 50
Author: Pooja Sharma
Roll no: 021330024151
Institution: ITM Business School
Introduction:
Pfizer is an American multinational pharmaceutical and biotechnological company headquartered at the spiral in Manhattan, New York City. The company was established in 1849 in New York by two German entrepreneurs, Charles Pfizer and his cousin Charles F. Erhart. Pfizer produces medicines and vaccines for immunology, oncology, cardiology, Endocrinology and Neurology.
Pfizer Limited was listed on the Bombay Stock Exchange (BSE) in 1966 and on the National Stock Exchange (NSE) in 1999.
Objective:
My objective is to find out Beta(β) value of Pfizer and its significance in NIFTY50.
Data Collection:
I have downloaded the data for NIFTY50 and Pfizer for the duration of 01-05-2023 to 30-04-2024 and noted down the Friday weekly closing prices and calculated the weekly return by using the formula (Yt+1-Yt)/Yt*100 (i.e. (C3-C2/C2*100).
Weekly return on NIFTY50 is denoted as “x” and Pfizer denoted as “y”.
“y” was regressed on “x”.
Data Analysis:
Intercept = A
X variable (weekly return) = β
Weekly report of Pfizer= -0.14(Intercept)+0.10(x variable)
(t-stat = 0.89644)
No. of Observation(N): 49
R^2 = 0.01717
F = 0.80361
Significance R = 0.37468
The above equation shows the relation between NIFTY50 and Pfizer, positive sign before Co-efficient of NIFTY50 shows that there is a positive relationship, If NIFTY50 rises by 1 unit Pfizer will rise by 0.1049 and vice versa.
The figure in bracket that is tStat for β and the P-value = 0.37468, which is greater than 0.05, which means β is statistically insignificant for the N= 49, R^2= 0.01717, which means 1.17% of Pfizer’s return explained by NIFTY50.
F = 0.80361 and the P-value ror that is 0.3746 meaning which is greater than 0.05 which means overall model is statistically insignificant at 5% level.
Conclusion:
As β is less than 1 and positive (0.1049), Pfizer is good for long term investment.