Title: Relationship of Nifty50 with Yes Bank Limited
Author: Yuvraj Koli
Introduction:
Yes Bank Limited, established in 2004 by Rana Kapoor and Ashok Kapur, is a major Indian private sector bank headquartered in Mumbai. It offers a full range of commercial banking products to corporate, MSME, and retail customers.
Objective:
Calculation of Beta & observe its Significance.
Literature Review:
William F. Sharpe (1964), beta measures how sensitive a stock’s returns are to changes in the overall market. A stock with a higher beta is more volatile and reacts strongly to market movements, whereas a stock with a lower beta shows less fluctuation and is considered more stable compared to the market.
Eugene F. Fama and Kenneth R. French (1992), beta alone is not sufficient to fully explain stock returns, although it remains an important measure of market-related risk. Their study highlights that multiple market factors, beyond beta, play a significant role in influencing stock performance and returns.
Data Collection:
Data for Nifty50 & Yes Bank Limited was downloaded from NSEindia.com For the period 01-01-2025 to 31-12-2025, Friday closing prices for Nifty50 & Yes Bank Limited were segregated weekly returns of Nifty50 & Yes Bank Limited were calculated. Weekly return of Nifty50 were taken as X & weekly return of Yes Bank Limited were taken as Y.
Y was regressed on X.
Data Analysis:
Equation- Y=0.0519+1.0273
N=48, R square =0.18, F=10.28,
P-value= 0.00244154, B=1.0273, t stat = 3.207.
The above equation shows the relationship between Nifty 50 and YES Bank Limited, there is positive relationship which means if Nifty 50 rises YES Bank Limited rises and vice-versa, if Nifty 50 rises by 1 unit the YES Bank Limited will rise by 1.02 units. Number of observation are 48, Tstat for beta is 3.207, the P-value for which is 0.0024 , which is less than .05, meaning beta is statistically significant at 5% level means Nifty 50 impacts at 5% level. R square is 0.18, meaning 18% of YES Bank Limited is explained by Nifty 50. 82% is the error due to the variables not included in the model. F is 10.28, and the P-value is 0.0024 which is less than .05 it means overall the model is statistically significant at 5% level.
Conclusion:
B>1, Hence invest for short term if nifty 50 rise
References:
William F. Sharpe (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. Journal of Finance, 19(3), 425–442.
John Lintner (1965). The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets. Review of Economics and Statistics, 47(1), 13–37.