Title: Relationship of SBI LIFE with Nifty 50.
Author: Sajit Kadam
Introduction: SBI Life Insurance, established in 2001, is a joint venture between State Bank of India and BNP Paribas Cardif. It offers a variety of life insurance and pension products for individuals and groups, including protection and savings plans. With a strong presence across India, SBI Life is known for its customer-focused services and financial stability.
Objective: To find out Beta of SBI LIFE & its Significance.
Data Collection: Data for Nifty50 & Sbi life was downloaded from NSE website, further period 1st June 2023 to 31st May 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: (y_(t+1)-〖 y〗_t)/y_t ×100 . Weekly returns of Sbi life were regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of Sbi life Steel = -67.23+0.05 Weekly returns of Nifty 50(1.08)
N = 49, R2 =0.024 F = 1.17, P-value = 0.29
The above equation shows the relationship between Nifty 50 & Sbi life. The negative sign before the coefficient of weekly returns of Nifty 50 means there is negative relationship. If Nifty 50 rise by 1unit, SBI LIFE will increase by 0.05 & vice versa. The Coefficient of Nifty 50 has t stat = 1.08 & the P value of which is 0.29 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=49, No of observations are 49. R2 is 0.024 which means 2.4% of Weekly returns of Sbi life are explained by Nifty 50. 97.6% depends upon other factors like fundamentals are other factors. F is 1.17 & the P value of this is 0.29 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is Positive is (0.05) , its suitable for short term investment