AUTHOR:
Riddhi Rathod
INTRODUCTION:
Rail Vikas Nigam Limited (RVNL) is a public sector enterprise (PSU) that works to develop and implement transportation infrastructure and rail projects for the Ministry of Railways (MoR) in India. RVNL was incorporated in 2003 to address the country’s growing infrastructure needs and to quickly implement projects.
OBJECTIVE:
Find out the beta of RVNL and its significance
DATA COLLECTION:
Data of RVNL and Nifty50 was downloaded from 1 May 2023 to 30 April 2024 from NSE and is manipulated to get Friday closing prices, weekly return of Nifty50 and RVNL was calculated. Weekly returns of RVNL is “ y” and weekly return of Nifty50 is” x” .Weekly returns of RVNL was regressed on weekly return of Nifty50.
DATA ANALYSIS:
Weekly return of Y= – 0.67+1.10 weekly return of Nifty50
T value =1.33
N= 49, R^2=0.03 , F=1.78, P value =0.188
INTERPRETATION:
The above equation shows the relationship between weekly return of RVNL and weekly return of Nifty50. The + sign before the coefficient of Nifty50 tells that if Nifty50 rises your company will also rise and vice versa .If Nifty50 rises by 1 unit ,company will rise by 0.90 unit.
1.33 (T stat per β) P value of which is 0.188 which is less than 0.5 meaning β is statistically significant at 5 % level.
R^2 -0.03 meaning 3% of companies return is explained by Nifty50, the remaining 97% is fundamental F is 1.78 and P Value is 0.188 that means DATA IS STATISTICALLY SIGNIFICANT
CONCLUSION :
1) If β is more than 1 and Nifty50 is at low, invest for short term
2) If β is less than 1 and Nifty50 at high, invest for long run.
3) If β is negative, avoid it.