Title: Relationship of Yuken India Limited with Nifty50
Author: Yash rane
Introduction: Yuken India Limited is an India-based company that manufactures hydraulic pumps and power units. It was established in June 1976 with technical and financial collaboration of Yuken Kogyo Company Limited, Japan.
Objective: To find out Beta (β) of Yuken India Limited and its significance.
Data Collection:
The Data was collected of Yuken India Limited and nifty 50 and downloaded from NSE website from 1st May 2023 to 30 April 2024. The data was manipulated to find Friday closing prices. The Weekly return of nifty was termed as “x” and Yuken India Limited was termed as “y” by using
Weekly return formula= (Yt+1-Yt)/Yt *100 and then we Y regressed on X.
Data analysis:
Regression equation:
Y= intercept of Yuken India Limited + β weekly return of nifty 50
Weekly return of Yuken India Limited = 1.37+(-0.94) weekly return of nifty 50
Y= 1.37+(-0.94) X
(t-stat= 0.43), N= 48, R square= 0.031, F= 1.48, P value= 0.22
The above equation shows the relationship between nifty50 and weekly returns of Yuken India Limited. Negative sign before coefficient of weekly return of nifty 50 means there is a negative relationship if nifty rises by one unit your company will fall by 0.94 unit and if it falls by 1 unit, it rises by 0.94 unit.
This figure in bracket is t-stats as (0.43) for beta. The p value for which is 0.22which is more than 0.05 meaning beta is not statistically significantly.
N=48, R2=0.031 which means 3.1% of Yuken India Limited are explained by Nifty 50. Other 96.9% is not explained in the model.
F=1.48 and p value is 0.22, which is more than 0.05 meaning overall model is not statistically significant.
Conclusion:
As per the given data of relationship of Yuken India Limited with Nifty 50, we know that beta value is less than 1 and negative meaning company is not good for investment. Investment in this company not beneficial.