TITLE-Relationship of SBIN with Nifty 50.
Author- Sakshi C Gabhane
Introduction-State Bank of India (SBI) is the largest public sector bank in India, with its headquarters in Mumbai. It was established in 1955 through the nationalization and merger of the Imperial Bank of India with several other banks. SBI provides a wide range of banking services, including retail banking, corporate banking, international banking, and treasury services. It is a trusted bank with a wide customer base due to its long-standing reputation and large-scale operations.
Objective: To find out Beta of SBI and its significance.
Data Collection: Data of SBI and Nifty 50 for the period from 1.06.2023 to 30.05.2024 is taken from NSE website. Data was manipulated to find out Friday closing prices and weekly returns for both Nifty 50 and SBIN and named as X Y respectively and after calculation ,Y was regressed on X.
Data Analysis: WEEKLY RETURN OF SBI =
0.32+0.13weekly return of Nifty(3.51)
N=48, R square=0.22, F=12.31, P value=0.001
Interpretation:
- The above equation shows the relationship between weekly returns of Nifty 50 and SBI . The positive sign before co-efficient of weekly return of Nifty means there is positive relationship if Nifty raises by 1 unit SBI raises by 0.13 unit and vice-versa.
- t- stat for Beta 3.51 and P-value 0.001 is less than 0.05 meaning beta is statistically significant at 5% level.
- N = 48 (Number of observation)
- R- Square = 0.22 means 22 % of weekly return of SBI are explained by Nifty,the rest 78% is standard error which depends on other factors like fundamentals.
- F = 12.31 and P-value = 0.001 meaning overall the model is statistically significant @ 5% level.
Conclusion:SBI is good for Long Term Investment