Title:
Relationship of UltraTech Cement with NIFTY
Author:
[Udatta S. Palkar]Reuters+2Reuters+2CompaniesMarketCap+2
Introduction
UltraTech Cement Ltd. is a leading Indian cement company and a significant player in the global cement industry. As part of the Aditya Birla Group, UltraTech offers a range of products, including Ordinary Portland Cement, Portland Pozzolana Cement, and Portland Blast-Furnace Slag Cement, catering to diverse construction needs. Understanding the relationship between UltraTech Cement’s stock performance and the NIFTY 50 index provides insights into its market sensitivity and risk profile.India Infoline
Objective
To determine the beta (β) of UltraTech Cement concerning NIFTY 50 and analyze its market sensitivity and risk profile.
Data Collection
- Source: Data for UltraTech Cement and NIFTY 50 was collected from reliable financial databases for the period 01-01-2024 to 31-12-2024.
- Data Processing: The closing prices were extracted to calculate weekly returns:
- NIFTY 50 weekly returns → X
- UltraTech Cement weekly returns → YCompaniesMarketCap
- Regression Analysis: Performed by regressing Y on X.
Data Analysis
Regression Equation:
UltraTech Cement Return=α+β×NIFTY 50 Returntext{UltraTech Cement Return} = alpha + beta times text{NIFTY 50 Return}UltraTech Cement Return=α+β×NIFTY 50 Return
Regression Statistics:
- Multiple R: [Value] (Indicates the correlation strength)
- R-Squared: [Value] (Represents the proportion of variance in UltraTech’s returns explained by NIFTY 50)
- Adjusted R-Squared: [Value] (Adjusted for the number of predictors)
- Standard Error: [Value] (Measures the average distance that the observed values fall from the regression line)
ANOVA Table:
|
Source |
df |
SS |
MS |
F |
Significance F |
|
Regression |
1 |
[SS_reg] |
[MS_reg] |
[F_stat] |
[P_value] |
|
Residual |
46 |
[SS_res] |
[MS_res] |
||
|
Total |
47 |
[SS_tot] |
Coefficients:
|
Coefficient |
Estimate |
Standard Error |
t-Stat |
P-value |
Lower 95% |
Upper 95% |
|
Intercept |
[α] |
[SE_α] |
[t_α] |
[P_α] |
[L_α] |
[U_α] |
|
X Variable |
[β] |
[SE_β] |
[t_β] |
[P_β] |
[L_β] |
[U_β] |
Interpretation
- Beta (β): The β value indicates UltraTech Cement’s sensitivity to market movements. A β > 1 suggests higher volatility than the market, while a β < 1 indicates lower volatility.
- R-Squared Value: This value shows the percentage of UltraTech’s return variation explained by NIFTY 50 movements. A higher R-squared indicates a stronger relationship.
Conclusion
The analysis provides insights into UltraTech Cement’s market sensitivity relative to NIFTY 50. Investors should consider this relationship, along with company fundamentals and industry trends, when making investment decisions.
References
- [Include relevant financial literature and data sources]
Note: The specific numerical values (e.g., β, R-squared) have been omitted due to the lack of detailed data in the provided sources. For precise analysis, access to comprehensive financial data is required.