Author: Ankit Nagarale ,32
Introduction:
Aarti Industries Limited (AIL) is a leading speciality chemical manufacturer with 40 years of chemistry expertise, with sustainable, people-first operations/approach. Aarti Industries Limited (AIL)combine process chemistry expertise with scale-up engineering to deliver advanced intermediates for a wide range of applications, including agrochemicals, pharmaceuticals, polymers, dyes, and more.
Objective:
To calculate the Beta (β) of Aarti Industries Limited (AIL) and observe its significance.
Literature Review:
Sharpe (1964): In the Capital Asset Pricing Model (CAPM), Beta serves as a measure of a security’s volatility relative to the market as a whole.
Fama & French (1992): Their research indicates that while Beta is a key risk factor, other variables also influence stock returns.
Data Collection:
Weekly data collected from NSE. X = Nifty 50 Returns and Y = Aarti Industries Limited (AIL). Y is regressed on X.
Data Analysis:
Regression Equation:
Y = 0.2914-0.2403X
|
Statistic |
Value |
|
Observations |
48 |
|
R Square |
0.006 |
|
F Value |
0.2744 |
|
P-value |
0.917 |
|
Beta |
-0.29 |
|
Intercept |
0.022 |
Interpretation:
Beta is negative and less than 1, showing weak relationship with Nifty 50 . If Nifty increases by 1 unit, Aarti Industries Limited (AIL) increases by 0.29 units. R square shows 0.6% variation explained. P-value >0.07 shows more significance. R Square is very small suggest that almost 94% of things are not explained by market
Conclusion:
Since Beta >0.5, Aarti Industries Limited (AIL) Limited is a unstable stock . Not suitable for investment ignore this company
References:
Sharpe, W. F. (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. Journal of Finance.
Fama, E. F., & French, K. R. (1992). The Cross-Section of Expected Stock Returns. Journal of Finance.
National Stock Exchange of India (NSE India). (2025). Historical data retrieved from official website.