Title: Relationship of Dabur company with Nifty 50
Author: Deepti Jagannath Meher
Introduction: Dabur India Ltd., founded in 1884, is a leading FMCG company known for its Ayurvedic and natural health products. It offers a diverse range of personal care, healthcare, and food products. With a global presence in over 120 countries, Dabur remains a trusted name in promoting wellness and natural living.
Objective: To find out the Beta of Dabur company and its significance.
Data collection: Data of Dabur company and Nifty 50 was downloaded from the NSE website for the period 01/06/2023 to 30/05/2024. Data was manipulated to find out Friday closing price and weekly returns of Nifty 50 and Dabur company were calculated. The weekly returns of Nifty 50 are denoted as ‘X’ and the weekly returns of Dabur company are denoted as ‘Y’. Y was regressed on X. How I calculated Weekly returns is (Yt+1–Yt) /Yt*100.
Data Analysis:
Weekly returns Dabur company = -0.14 + 0.37 Weekly returns of Nifty
(1.62)
N = 48, R Square = 0.05, F = 2.63, P-value = 0.11.
Interpretation:
- The above equation shows the relationship between weekly returns of Nifty 50 and Dabur. The positive sign before the co-efficient of the weekly return of Nifty means there is positive relationship. If Nifty raises by 1 unit Dabur company will raises by (Y = -14 + 0.37x) 0.3 unit and vice-versa.
- t- start for Beta is 1.62 which is written in bracket and P-value is 0.11 which is less than 05 meaning beta is statistically significant at 5% level.
- N = 48, means number of observations are 48.
- R-Square = 0.05 which means 5% of the weekly return of Dabur company are explained by Nifty.
- F = 2.63 and P-value = 0.11 meaning overall the model is statistically significant at 5% level.
Conclusion: As my beta is more than 1 I can invest for the short term.