Title: Relationship of Vodafone Idea with Nifty 50
Author: Vaidehi Shinde
Introduction: Vodafone Idea (Vi) is India’s third-largest telecommunications company, formed in 2018 through the merger of Vodafone India and Idea Cellular. It offers a wide range of telecommunication services, including voice, data, and value-added services, across India. Vi aims to provide reliable and affordable connectivity to its customers, contributing to the country’s digital transformation.
Objective: To find out Beta of Vodafone idea and its significance.
Data Collection: The data of Nifty 50 and the data for Vodafone idea was downloaded from 01-05-2023 to 30-04-2024 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and Vodafone idea. Weekly return was calculated by the formula (Yt+1-Yt)/Yt*100 and then weekly returns of the Nifty 50 was taken as X and the equity of Vodafone Idea was taken as Y. Y was regressed on X.
Data Analysis: Weekly return of Vodafone Idea = (-0.42) + (-1.38)
N = 47, R2 = 0.056, t stat = (-0.37), F = 2.70, P-value = 0.10
The above Equation shows the relationship between nifty 50 and Vodafone Idea. Negative sign before the co-efficient of Nifty 50 tells us that there is a negative relationship. If Nifty rises 1 unit your company will rise by 0.90 and Vice-Versa. Figures in brackets is t stats for Beta and P value is 0.10 which is more than 0.5 meaning that the Beta is not statistically significant. No of observations are 47. R^2 is 0.056 which means 5.6% of the company’s return are explained by Nifty 50. F= 2.701 and the P value for that is 0.10. It is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion: β< 1 and positive (less than 1) means good for long term investment.