Title: Relationship of Nippon India with Nifty50
Author: Neeraj Dilip Pathak
Introduction: Nippon India Asset Management Company, a leading player in the Indian asset management industry, has made a significant mark since its establishment in 1996. The company, formerly known as Reliance Mutual Fund, is recognized for its robust investment strategies and extensive product offerings, catering to a diverse clientele of retail and institutional investors.
Nippon India reached its highest share price of around ₹400 per share in early 2021, reflecting strong investor confidence and the growing interest in mutual funds amid a recovering economy. This peak was driven by the company’s solid performance, innovative fund management practices, and a focus on digital transformation to enhance investor engagement.
Objective: To find out Beta of NIPPON and it’s significance.
Data Collection: Data for Nifty50 and NIPPON INDIA was downloaded from NSE website, further period 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: (Yt-1 – Yt)/Yt*100 Weekly returns of NIPPON was regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of NIPPON = 0.51 + (-0.01)
N = 46, R2 = 0.0025, t-stat = (-0.3365), F = 0.1132, P-value = 0.7380
The above equation shows the relationship between Niffty50 & NIPPON INDIA. The negative sign before 0.01 means if Nifty50 raises Nippon decrease & vice versa. The Coefficient of Nifty50 has t-stat = (-0.3365) & the P value of which is 0.7380 meaning Nifty50 is not statistically significant. To increase the prices of NIPPON, R2 is 0.0025 meaning 0.25% of NIPPON prices are explained by Nifty50. 99.9% dependent upon other factors like fundamentals are other factors. F is 0.1132 & the P value of this is 0.7380 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion:
-0.01 coefficient is negative, so avoid this for any investment.