Relationship of Nifty 50
with
Orissa Bengal Carrier Limited (OBCL)
About Orissa Bengal Carrier Limited (OBCL)
Orissa Bengal Carrier Limited (OBCL) is an Indian logistics and transportation company listed on the NSE. The company provides cargo transportation services across India and operates in the logistics and freight movement sector, which is sensitive to fuel prices, demand cycles, and company-specific operational factors.
Objectives of the Study
- To study the relationship between Nifty 50 index and Orissa Bengal Carrier Limited (OBCL) stock price.
- To calculate the beta of OBCL and test whether it is statistically significant.
Data Collection
- Historical price data of OBCL and Nifty 50 index was collected for a one-year period.
- The data was processed to obtain weekly (Friday) closing prices.
- Total number of observations used in the study: 48.
Data Analysis
From the regression output:
- Intercept (a) = 7.6132
- Beta coefficient (b) = –0.0003186
Regression Equation:
OBCL
Price=7.61-0.000318×Nifty
50
Interpretation of Results
- The negative beta (–0.000318) indicates a very weak inverse relationship between Nifty 50 and OBCL stock price.
- This means that if the Nifty 50 increases by 1 unit, OBCL’s price is expected to decrease by only 0.000318 units, which is economically negligible.
Statistical Significance of Beta
- t-statistic for beta = –0.5285
- p-value = 0.5997
Since the p-value is greater than 0.05, the beta coefficient is not statistically significant, even at the 5% level.
Therefore, OBCL does not reliably move with the Nifty 50 based on this data.
R-Square Interpretation
- R² = 0.0060 (0.6%)
This indicates that only 0.6% of the variation in OBCL’s stock price is explained by movements in the Nifty 50, while 99.4% of the variation is due to other company-specific or sector-specific factors.
Overall Model Significance (F-Test)
- F-value = 0.2793
- Significance F (p-value) = 0.5997
Since the F-test p-value is greater than 0.05, the overall regression model is not statistically significant.
Summary of Key Results
- Number of observations = 48
- R-square = 0.0060
- Beta = –0.000318
- F-value = 0.2793
- Model significance = Not statistically significant
Conclusion
- The Nifty 50 index has negligible explanatory power in predicting OBCL’s stock price using this one-year weekly data.
- OBCL’s stock movements are largely influenced by company-specific, sectoral, and operational factors rather than overall market movements.
- The regression model is weak and unsuitable for forecasting or trading decisions.
References
- Frost, J. (2017). How to Interpret R-squared in Regression Analysis.
- Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th ed.). McGraw-Hill.
