{"id":23280,"date":"2025-12-23T19:42:07","date_gmt":"2025-12-23T14:12:07","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=23280"},"modified":"2025-12-23T19:42:07","modified_gmt":"2025-12-23T14:12:07","slug":"relationship-of-nifty-50-with-sbi-mutual-fund","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23280","title":{"rendered":"Relationship of NIFTY 50 with SBI Mutual Fund"},"content":{"rendered":"
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Introduction<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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SBI Mutual Fund is one of the largest and oldest asset management companies in India. It is sponsored by the State Bank of India and was\u00a0<\/span>established<\/span>\u00a0in 1987. The fund house offers a wide range of investment products including equity, debt, hybrid, and index-based schemes.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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SBI Mutual Fund plays\u00a0<\/span>an important role<\/span>\u00a0in the Indian financial market by\u00a0<\/span>providing<\/span>\u00a0investment opportunities to retail and institutional investors. Its equity-oriented schemes are influenced by market conditions, economic factors, and movements in benchmark indices such as the NIFTY 50.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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This study examines the relationship between SBI Mutual Fund\u2019s equity-linked price movements and the NIFTY 50 index.<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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Objective<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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The primary objective of this study is to analyze the systematic risk of SBI Mutual Fund\u2019s equity-linked returns in relation to the broader market represented by the NIFTY 50 Index.<\/span>\u00a0Specifically, the study aims to:<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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    Calculate the Beta coefficient of SBI Mutual Fund.<\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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      Determine<\/span>\u00a0the volatility of SBI Mutual Fund returns compared to the market.<\/span><\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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        Assess whether the fund behaves as an aggressive or defensive investment during the selected period.<\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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        Literature Review<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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        This analysis is based on the\u00a0<\/span>Capital Asset Pricing Model (CAPM)<\/span>, which is widely used to measure the relationship between asset returns and market returns.<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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        Systematic Risk (Beta):<\/span>\u00a0<\/span>
        <\/span>Beta measures the sensitivity of an\u00a0<\/span>asset\u2019s<\/span>\u00a0returns to changes in market returns.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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          Beta = 1:<\/span>\u00a0Asset moves in line with the market<\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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            Beta > 1:<\/span>\u00a0Asset is more volatile than the market (Aggressive)<\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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              Beta < 1:<\/span>\u00a0Asset is less volatile than the market (Defensive)<\/span>\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n<\/div>\n

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              Unsystematic Risk:<\/span>\u00a0<\/span>
              <\/span>This is\u00a0<\/span>asset<\/span>-specific risk caused by factors such as fund strategy, portfolio composition, and management decisions. It can be reduced through diversification and is represented by the error term in regression analysis.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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              Regression Equation<\/span>\u00a0<\/span><\/p>\n<\/div>\n

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              <\/span>The relationship between SBI Mutual Fund returns and NIFTY 50 returns is modeled using the following regression equation:<\/span>\u00a0<\/span><\/p>\n<\/div>\n<\/div>\n

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              \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Ri = Alpha + Beta (Rm) + Epsilon<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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              Where:<\/span>\u00a0<\/span>
              <\/span><\/p>\n

              R<\/span><\/span>i<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span>