Author: Rohan Murkeya
Introduction:
Raymond Limited is an Indian company incorporated in 1925, originally established as a woolen mill in Thane, Maharashtra. Over the years, it has evolved into a prominent player in the textile and apparel sectors, producing a wide range of products including suiting fabric, with a capacity of producing 31 million meters annually.
Raymond Ltd shares have been trading between ₹1,687.00 and ₹1,576.00. The stock has delivered a return of 58.96% this year, but it has decreased by 9.31% in the last five days. Please double-check this information for the latest updates.
Data Collection:
Data was downloaded from NSE India site for the period 1 May 2023 to 30 April 2024.
Data was manipulated to find the Friday closing price.
Weekly Returns of Raymond Ltd. And NIFTY 50 were calculated.
Weekly Return of Raymond Ltd. Is Y and Weekly Return of NIFTY 50 is X.
Weekly Return of Raymond Ltd. Was regressed on Weekly Return of NIFTY 50.
Data Analysis:
Weekly Return of Y = 0.002 + 1.132
T stat = (2.73)
N=48 R square= 0.14 F=7.43
P value= 0.009
Interpretation:
The above equation depicts the relationship between weekly returns of Raymond Ltd. And weekly returns of NIFTY 50.
The + sign before the coefficient of NIFTY 50 tells that if NIFTY 50 rises Raymond Ltd. Will also rise and vice-versa. If NIFTY rises by 1 unit Raymond Ltd. Will rise by
Figure in bracket (2.73) is t stat for β (beta) and P value for which is 0.009 which is less than 0.05 meaning β (beta) is statistically significant at 5% level.
R square is 0.14 meaning 14% of company’s return are explained by NIFTY 50 the balance 86% maybe due to fundamentals.
F is 7.43 and P value is 0.009 meaning overall model is statistically significant.
Conclusion:
As β is 1.13 which is greater than 1 indicates that NIFTY is at low and investing for short term in Raymond Ltd. Is good choice.