TITLE: – Relationship of Abbott India and Nifty 50
AUTHOR: – Alifiya Moaiyadi
INTRODUCTION: –
Abbott India is a pharmaceutical company that has been dedicated to helping people in India live a healthier life through a diverse range of science based nutritional products, diagnostic tools, branded generic pharmaceuticals, and diabetes and vascular devices. IT is a part of Abbott’s global pharmaceutical business in India.
DATA COLLECTION: –
The data of Nifty 50 and Abbott India was downloaded from NSE website, i.e., nseindia.com for the period of 1/05/2023 to 30/04/2024. The data was shaped to find out Friday’s closing price and its Weekly returns were calculated. Weekly return [(yt+1 – yt)/yt*100] of Nifty 50 was termed as X and of Abbott India as Y. Then, Y was regressed on X.
DATA ANALYSIS: –
Regression Equation
Weekly return of Abbott India = -0.32 – 0.74 weekly return of nifty
(-1.49)
N= 47
R2 = 0.04
F = 2.23
P-value = 0.14
The above equation shows the relationship between Nifty 50 and Weekly return of Abbott India. The negative sign before the coefficient of weekly return of nifty tells us that there is a negative relationship. If Nifty rises by 1 unit, Abbott India will reduce by 0.74 unit and vice versa.
Figure in bracket is t-stat for beta and p-value is 0.14, which is more than 0.05 meaning that beta is not statistically significant. R2 is 0.04, which means only 4% of weekly return of Company are explained by Nifty.
F= 2.23 and p-value for that is 0.14 meaning overall model is not statistically significant.
Conclusion: –
As the beta of Abbott India is negative, it is advisable to avoid investing.