Regression analysis of weekly returns between NIFTY50 and Dr. Reddy\u2019s Laboratories<\/p>\n
Submitted by: Darshana Manoj Shiporkar
\nJDBIMS (MMS FY 2021-2023)<\/p>\n
Introduction:
\nDr. Reddy’s Laboratories is an Indian multinational pharmaceutical company located in Hyderabad, Telangana, India. The company was founded by Kalam Anji Reddy, who previously worked in the mentor institute Indian Drugs and Pharmaceuticals Limited.
\n Dr. Reddy’s manufactures and markets a wide range of pharmaceuticals in India and overseas. The company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care, and biotechnology products.<\/p>\n
Objective:
\nTo understand the regression relationship between average weekly returns of Nifty50 and Dr. Reddy\u2019s Laboratories.<\/p>\n
Data Collection:
\nThe closing price data of Nifty50 and Dr. Reddy\u2019s Laboratories was taken from www.nseindia.com (National stock exchange) for the time period from 1st April 2021 to 31st March 2022.
\nFrom the available data, the closing rates of all the Fridays in the year was sorted to find out the weekly returns for both Nifty as well as Dr. Reddy\u2019s Laboratories. Then weekly return for both was calculated using Formula:
\nWeekly Return = ((C3-C2)\/C2) *100
\nWhere, C2 is Present week closing price and C1 is previous weeks closing price.
\nOnce the data is calculated, weekly return column for NIFTY50 is considered as X variable and the weekly returns column for Dr. Reddy\u2019s Laboratories is considered as Y variable.
\nThe Model ad formulas used are:
\nY = a + bX
\nX\u207b = \u2211X\/N
\nY\u207b = \u2211Y\/N
\nx = X – X\u207b
\ny = Y – Y\u207b
\nb = \u2211xy\/ \u2211(x^2)
\na= Y\u207b – bX\u207b
\ne = Y – Y\u207b
\nVariance of error = ((\t\u03c3e) ^2\/\u2211x^2)
\nT stat for b = b\/ S.E of b
\nTSS = ESS +RSS
\nESS= (b^2) *(\u2211x^2)
\nRSS = \u2211e^2
\nR^2 = ESS\/ TSS
\nF= Mean ESS\/ Mean RSS<\/p>\n
Data Analysis:
\nUtilizing the regression Add-on in Microsoft Excel Data analytics tool below values were acquired:
\nR square= r^2 = 0.16176315899731
\na= -0.464557594
\nb= 0.728276756
\nF= 8.10517069347652
\nP value= 0.416544777597657
\nBelow expression shows the relationship model between Dr. Reddy\u2019s Laboratories and NIFTY50 weekly returns.
\nDr. Reddy\u2019s Laboratories Weekly Return = -0.464557594 + 0.728276756*(NIFTY50 Weekly Returns)<\/p>\n
Conclusion:
\nBased on the research methodology and data analysis performed we can conclude that only 16% of Dr. Reddy\u2019s Laboratories weekly returns can be explained by NIFTY50 weekly returns, remaining 84% is dependent on Dr. Reddy\u2019s Laboratories fundamentals and policies.
\nSince F value is greater than the P value this model is not statistically good and significant. Risk factor of using this model for forecasting Dr. Reddy\u2019s Laboratories weekly returns are very High.<\/p>\n","protected":false},"excerpt":{"rendered":"
Regression analysis of weekly returns between NIFTY50 and Dr. Reddy\u2019s Laboratories Submitted by: Darshana Manoj Shiporkar JDBIMS (MMS FY 2021-2023) Introduction: Dr. Reddy’s Laboratories is an Indian multinational pharmaceutical company located in Hyderabad, Telangana, India. The company was founded by Kalam Anji Reddy, who previously worked in the mentor institute Indian Drugs and Pharmaceuticals Limited.… Continue reading Regression analysis of weekly returns between NIFTY50 and Dr. Reddy\u2019s Laboratories<\/span><\/a><\/p>\n","protected":false},"author":93236,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[355],"class_list":["post-16372","post","type-post","status-publish","format-standard","hentry","category-management","tag-jdbims","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/16372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/users\/93236"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16372"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/16372\/revisions"}],"predecessor-version":[{"id":16473,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/16372\/revisions\/16473"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16372"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}