Relationship of Apollo hospital with Nifty 50
Author: Moirangthem Arron Singh
F4 2024-26 – 021330024341, ITM Business School, Kharghar, Maharashtra, India
Introduction: Apollo Hospitals, founded in 1983 by Dr. Prathap C. Reddy, is a leading healthcare provider in India, known for advanced medical technology and quality care. With a vast network of facilities, it plays a crucial role in healthcare innovation and education, impacting both India and beyond.
Objective: To find out the Beta of Apollo hospitals and its significance with reference to Nifty 50.
Data Collection: The data for Nifty 50 and Apollo hospitals was downloaded from official site of NSE for the period 1st June 2023 to 31st May 2024. Data was manipulated to get Friday closing prices and weekly returns of Nifty 50 and Apollo hospitals was calculated using the formula (Yt+1 – Yt) / Yt * 100 and then Y was regressed on X. Here Y is Weekly returns of Apollo hospitals and X is weekly returns of Nifty 50.
Data Analysis:
Weekly Returns of Apollo hospitals = -0.27+-0.018 Weekly Returns of Nifty 50
(-0.051)
N = 49
R2 = 0.000055
F = 0.0026
P-value = 0.95
t-stat = -0.051
Interpretation: The above equation shows the relationship between Nifty 50 and Apollo hospitals Company. The negative sign before the coefficient of weekly returns of Nifty 50 means there is negative relationship. If Nifty 50 rise by 1unit, Apollo hospitals will decrease by 0.27 & vice versa. The Coefficient of Nifty 50 has t stat = (-0.051) & the P value of which is 0.959 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 0.000055 which means 5% of Weekly returns of Apollo hospitals Company are explained by Nifty 50. 95% depends upon other factors like financial results, market trends and other factors. F is 0.0026 & the P value of this is 0.959 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is negative (-0.27), avoid the investment.