📊 Data Analysis Report
Relationship Between NIFTY 50 Returns and Tata Chemicals Returns
1. Introduction
This report analyzes the relationship between weekly returns of the NIFTY 50 index and weekly returns of Tata Chemicals Ltd. using simple linear regression analysis.
The objective is to understand whether market movements (NIFTY 50) significantly influence the stock returns of Tata Chemicals.
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2. Data Description
Dependent Variable (Y): Weekly Returns of Tata Chemicals
Independent Variable (X): Weekly Returns of NIFTY 50
Number of Observations: 47 weekly data points
Time Period: As per dataset shown in Excel (weekly returns)
3. Regression Model
The regression equation used is:
text{Tata Chemicals Returns} = alpha + beta (text{NIFTY Returns}) + varepsilon
Where:
α (Intercept) represents returns independent of market movement
β (Beta) measures sensitivity of Tata Chemicals to NIFTY movements
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4. Regression Statistics Interpretation
Metric Value Interpretation
Multiple R 0.0055 Extremely weak correlation
R Square 0.0000298 Only 0.003% variation explained
Adjusted R Square -0.0222 Model has no explanatory power
Standard Error 269.02 High volatility in returns
Observations 47 Adequate for basic regression
🔍 Inference:
NIFTY returns explain almost none of the movement in Tata Chemicals returns.
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5. ANOVA Results
Metric Value
F-statistic 0.00134
Significance F 0.971
🔍 Inference:
Significance F ≫ 0.05
The regression model is statistically insignificant
Overall model fails to explain the relationship
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6. Coefficient Analysis
Variable Coefficient P-value Interpretation
Intercept -40.43 0.309 Not statistically significant
NIFTY Returns (Beta) -0.514 0.971 No market sensitivity
🔍 Key Insight:
Beta value is negative but statistically insignificant
Tata Chemicals does not move in line with NIFTY
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7. Investment Interpretation
Tata Chemicals behaves as a low market-correlated stock
Returns are driven more by:
Company fundamentals
Commodity prices
Chemical sector dynamics
Firm-specific news
Suitable for portfolio diversification
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8. Conclusion
Based on the regression analysis:
There is no significant relationship between NIFTY 50 returns and Tata Chemicals returns.
Market movements do not influence Tata Chemicals in a predictable manner.
Tata Chemicals stock exhibits independent return behavior.
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9. Limitations of the Study
Only one independent variable (NIFTY) considered
Short-term weekly data
Sector-specific and macroeconomic variables excluded
10. Final Remark
This analysis suggests that Tata Chemicals is weakly connected to overall market movements, making it suitable for investors seeking risk diversification rather than market-tracking returns.