TITLE: RELATIONSHIP OF VEDANTA LTD WITH NIFTY50
AUTHOR: VISHVA SHAH (021330024546)
INTRODUCTION: Vedanta Limited
Vedanta Limited is an Indian multinational mining company headquartered in Mumbai, with its main operations in iron ore, gold, and aluminum mines in Goa, Karnataka, Rajasthan, and Odisha.
As per the market data ‘Vedanta’ stock trades on the NSE and BSE, with share prices fluctuating around ₹300-₹500, reflecting its steady performance in the automotive industry.
Object: To find out the beta (β) of Vedanta and its significance
Data Collection: The data was collected by taking the weekly return of NSE (National Stock Exchange), NIFTY50, and Vedanta dated 1 year from 1st May 2023 to 30th April 2024 with the help of the NSE site. Friday closing price and weekly return were calculated by formula.
The weekly return of Nifty was taken as (X) in terms of company (Vedanta) as Y is taken. Y was regressed on X.
Data analysis: Regression equation; Y (Intercept)= Vedanta+ NIFTY 50
Relationship of Nifty 50 and Vedanta = (0.5661) +(-0.144) (-0.287) {t-stat})
N = 48, = 0.00178, F = 0.0821, P(VALUE)= 0.3897
The above equation shows the relationship between Nifty 50 and Apollo Tyres, a positive sign before the co-efficient of Nifty 50. Tells us that there is a positive relationship if nifty is down by 1 unit, the company will be down by -0.525.
And vice versa as the co-efficient of t stats as (2.471) for beta. The p-value is 0.775 which is higher than 0.05 meaning beta is statistically insignificant.
N=48, =0.00178which means 0.178%of Vedanta returns are explained by Nifty 50. Other 99.822% are variable explained not in model.
f= 0.0821and p-value for that variable is 0.3897, it is higher than 0.05 meaning overall model is statistically insignificant at 5% level
Conclusion: As per the given data on the RELATIONSHIP OF VEDANTA LTD WITH NIFTY50, We know that: – a beta value <1 and Negative, means the company (Vedanta) is not good for long-term investment.