Title: Relation of Nifty 50 with Nestle India
Author: Nikita Sonawane – 50
Introduction:
This study examines the relationship between the performance of the Nifty Fifty index and the stock returns of Nestle India. The objective is to analyze how movements in the overall market influence the returns of Nestle India. For this purpose, secondary data on daily or monthly returns of both Nifty Fifty and Nestle India is collected and analyzed using regression analysis. The methodology helps estimate the beta value and determine the extent to which market fluctuations affect the company’s stock performance.
Objective: Calculation of Beta and observe it’s significance
Literature review:
Lalitha (2025) finds that beta captures the market risk of NSE stocks, though its explanatory power can vary across periods. She suggests using beta alongside other risk measures to achieve more accurate risk assessments for portfolio management.
Basanna and Konnur (2019) highlight that beta in the Single Index Model helps construct optimal portfolios using NIFTY 50 stocks. They demonstrate how beta links individual stock returns to the market index, guiding investment and risk decisions.
Data collection:
Data for Nifty 50 and Nestle India was downloaded by Nseindia.com for the period 01/01/2025 to 31/12/2025 Friday closing price for Nifty 50 and Nestle India were calculated. Weekly returns of Nifty 50 were taken as X and Weekly return of Nestle India were taken as Y. Y was regressed on X.
Data Analysis:
Y= -0.89+1.06X
N= 48 R Square= 0.05 F= 2.61
P = 0.11 B= 1.06 T-Stat = 1.61
The above Equation shows the relationship between NIFTY 50 and Nestle India. Positive means their Direct relation which means if NIFTY 50 stock rises Nestle India stock rise and vice versa. If NIFTY 50 stock increases by 1 unit, the Nestle India stock increases by 1.06 unit. Number of observations is 48. T-stat for beta is 1.61. The P value is 0.11 less than 0.5 meaning Beta is statistically significant at 5% level. R square is 0.05 meaning 5% is the error due to the variable not included in model. F is 2.61 and P value is 0.11 less than 0.5 meaning Beta is statistically significant at 5% level
Conclusion:
B>1 , Hence invest for short term if Nifty 50 rise
Reference:
Lalitha, N. (2025). A Test of Risk–Return Relationship for Stocks Traded on the NSE. Indian Journal of Research in Capital Markets, 12(1), 27–40.
Basanna, P., & Konnur, N. P. (2019). Construction of an Optimal Portfolio Using the Single Index Model: An Empirical Study of Nifty50 Stocks. Indian Journal of Research in Capital Markets, 6(4), 20–35.