Relationship of Schneider Electric India Limited with Nifty
Author: Sahil Chaubal
Roll no 67
Introduction
Schneider Electric India is a leading company in energy management and automation, playing a crucial role in India’s industrial and infrastructure sectors. The company specialises in digital transformation, energy efficiency, and automation solutions, catering to various industries, including power, manufacturing, and IT services.
Objective
To find out the Beta of Schneider Electric India and its significance.
Literature Review
- New Approaches to Market Volatility Assessments
– Recent studies emphasise refined methodologies for assessing market volatility. Traditional models focusing solely on historical price movements are limited in capturing dynamic risk factors.
– Emerging approaches integrate firm-level productivity metrics and macroeconomic indicators to improve the accuracy of risk assessments.
2. Impact of Market Beta on Investment Decisions
– Research suggests that companies with a high beta are more volatile and react significantly to market fluctuations.
– Investors often use beta as a risk indicator to determine whether a stock aligns with their portfolio strategy.
Data Collection
Schneider Electric India’s stock price data and relevant market index data were collected for a specific period. The dataset includes weekly closing prices to analyze the relationship between the company’s stock performance and the market index.
Data Analysis
Regression Equation:
[
Schneider Electric India = 0.0066 + 1.8956 times (Market Index)
]
Interpretation:
– The coefficient (1.8956) suggests that for every unit increase in the market index, Schneider Electric India’s stock price is expected to increase by 1.8956 units.
– The R² value (0.1541) indicates that approximately 15.41% of the variation in Schneider Electric India’s stock price can be explained by changes in the market index.
– The F-value (8.20) and p-value (0.0063) confirm that the regression model is statistically significant at the 5% level, meaning that the relationship between the stock price and the market index is valid.
Conclusion
Schneider Electric India’s beta of 1.90 indicates that it is highly volatile, meaning it reacts significantly to market fluctuations. This suggests that the stock is more suitable for investors seeking higher risk and higher returns in the short term.
References
Stock Note – Schneider Electric Infrastructure Ltd.”
Published by: HDFC Securities, December 11, 2023. HDFC Securities
“Schneider Electric Infra Ltd. – A Stronger Struxure”
Published by: JainMatrix Investments, December 6, 2024. JainMatrix Investments