Relationship of SBI LIFE with Nifty 50
Author: SAURABH PANDEY
1 F2 2024-26 – 021330024362, ITM Business School, Kharghar, Maharashtra, India
* Corresponding Author E-mail: dp29022002@gmail.com
Introduction:: SBI Life Insurance performed well during the financial year 2023-24. One of its highlights is its impressive claim settlement ratio, which reached 98.30%, improving from 97.05% in the previous year. This strong performance reflects SBI Life’s reliability and efficiency in processing claims.
Objective: To find out SBI LIFE and its significance.
Data Collection: Data for Nifty 50 and SBI LIFE was downloaded from https://www.nseindia.com/ for the period 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated using formula (Yt+1 – Yt) / Yt * 100. Weekly returns of SBI LIFE were regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly Returns of Prestige = -0.909 + 0.55 Weekly Returns of Nifty
(2.1112)
N = 45, R2 = 0.092, F = 4.46, P-value = 0.04
The above equation shows the relationship between Nifty 50 and SBI LIFE . The positive sign before 0.55 means if Nifty 50 rises, SBI LFE also rise and vice versa. The coefficient of Nifty 50 has t Stat = 2.112, the P-value of which is 0.04. It is less than 0.05 meaning Nifty 50 is statistically significant to increase the price of SBI LIFE . R2 is 0.092 meaning 0.1% of SBI LFE prices are explained by Nifty 50. 99.9% depends upon other factors like fundamentals. F is 4.46 and P-value is 0.04 meaning it is less than 0.05 meaning overall model is statistically significant.
Conclusion: Beta value is 0.55 which is less than 1 & positive, means it is good for long term investment if nifty is at bottom. SBI LFE is good for long term investment.
