Title – Relationship of SBI life Insurance with Nifty 50
Author – Shrishti Budhdeo
Introduction– SBI Life Insurance Company is a leading life insurance provider in India, backed by SBI and BNP Paribas Cardiff. Its stock has shown consistent growth, with the price standing at ₹1,798.09 as of October 2024, just below its all-time high of ₹1,936. Over the past year, the stock has moved between a low of ₹1,264.33 and a high of ₹1,936, indicating strong market performance and investor interest.
Objective– To find out Beta of SBI Life insurance company and its significance.
Data Collection– Data of SBI Life Insurance Company and Nifty 50 was downloaded from NSE for the period 1st May 2023 to 30th April 2024. The data was manipulated to obtain the Friday closing prices. The weekly return of Nifty 50 is represented as “X,” and the weekly return of SBI Life Insurance is represented as “Y.” A regression analysis was performed with the weekly return of SBI Life Insurance (Y) as the dependent variable and the weekly return of Nifty 50 (X) as the independent variable.
Equation
Weekly return of company = 0.91+0.98 (Weekly return of nifty 50)
T test = 34.45
N=49
R Square = 0.96
F= 1186.53
P= 0.00
Interpretation- The above equation depicts the relationship between weekly return of SBI Life Insurance and Weekly Return of Nifty 50. The plus sign before the coefficient of Nifty 50 tells that if Nifty 50 rises SBI Life insurance will also rise and vice a versa. If Nifty 50 rises 1 units SBI Life insurance will also rise 0.98 units 34.45 is T test for beta and P value of which is 0.00 which is less than 0.05 meaning beta is statistically significant at 5% level. R square is 0.96 meaning 96% of companies return are explained by Nifty 50 and balance 4% may be due to Fundamental. F IS 1186.53 and P value is 0.00 meaning overall model is statistically significant.
Conclusion – Coefficient of weekly return nifty 50 is less than 1 meaning SBI Life insurance is good for long term investment .