{"id":23551,"date":"2025-12-30T23:47:31","date_gmt":"2025-12-30T18:17:31","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=23551"},"modified":"2025-12-30T23:47:31","modified_gmt":"2025-12-30T18:17:31","slug":"a-study-of-relationship-between-axis-bank-ltd-nifty-50-index","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23551","title":{"rendered":"A Study of Relationship Between Axis Bank Ltd. & Nifty 50 Index"},"content":{"rendered":"

A Study of Relationship Between Axis Bank Ltd. & Nifty 50 Index<\/span><\/h1>\n

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1.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span><\/span>Introduction Of the Company<\/span><\/p>\n

Axis Bank Ltd.\u00a0<\/span>is one of India\u2019s premier private sector financial institutions, operating across a wide spectrum of services including retail banking, corporate credit, treasury, and wealth management. It is a major constituent of the\u00a0<\/span>NIFTY 50 Index\u00a0<\/span>and holds substantial weight, actively influencing the trajectory of the banking sector and the broader market.<\/span><\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span><\/span>Objective of study<\/p>\n

<\/span><\/p>\n

To determine the\u00a0Beta (\u03b2)\u00a0of Axis Bank and observe its significance in relation to the\u00a0NIFTY50\u00a0index.<\/span><\/p>\n

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3.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span><\/span>Literature Review<\/span><\/p>\n


<\/span>Mazgaonkar, S. (2024)\u00a0<\/span>published the most relevant recent study titled\u00a0<\/span><\/span>\u201cAnalysing the relationship between Axis Bank stock performance, Nifty Fifty, and Nifty Bank indices: A comparative study\u201d\u00a0<\/span>in the\u00a0<\/span><\/span>International Journal of Research in Finance and Management. The study explicitly calculated the correlation coefficient (0.968) between Axis Bank and the Nifty 50 over the 2020\u20132024 period, concluding that the stock and the index share a strong “long-run equilibrium” and are statistically inseparable.<\/span><\/span><\/p>\n

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Sathyanarayana, S. & Harish, S. N. (2017)\u00a0<\/span>authored the paper\u00a0<\/span><\/span>\u201cAn Empirical Study on Stability of Beta in Indian Stock Market with Special Reference to CNX Nifty 50,\u201d\u00a0<\/span>published in the\u00a0<\/span><\/span>IUP Journal of Financial Risk Management. This research focused on the “Beta” (risk) stability of Nifty constituents, identifying Axis Bank as a “High Beta” stock (often >1.2), meaning it acts as an aggressive driver of the index rather than a passive follower.<\/span><\/span><\/p>\n

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Chandran, P. (2016)\u00a0<\/span>is frequently cited in literature (e.g., by\u00a0<\/span><\/span>Palanisamy & Parthasarathy) for her work on\u00a0<\/span><\/span>\u201cVolatility and Return with Reference to Stocks of Bank Nifty vs. Nifty 50.\u201d\u00a0<\/span>Her research utilized econometric models to identify private sector banks as “net transmitters” of volatility, meaning panic in Axis Bank stock often statistically precedes a drop in the Nifty 50.<\/span><\/span><\/p>\n

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4.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span><\/span>Data Collection<\/p>\n

<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Historical data of\u00a0<\/span>Axis Bank<\/span><\/span>\u00a0Limited<\/span><\/span>\u00a0and\u00a0NIFTY50<\/span>\u00a0index was\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0collected from the NSE website for the period\u00a001-12-2024 to 31-11-2025<\/span>. The data was filtered to obtain\u00a0Friday closing prices<\/span>\u00a0for consistency.<\/span><\/p>\n

\u00b7\u00a0Independent Variable (X):<\/span><\/span>\u00a0NIFTY50<\/span><\/p>\n

\u00b7\u00a0Dependent Variable (Y):<\/span><\/span>\u00a0Axis Bank Limited equity price<\/span><\/p>\n

A\u00a0linear regression analysis<\/span>\u00a0was conducted by regressing\u00a0Axis Bank Limited\u00a0equity prices on NIFTY50 index values.<\/span><\/p>\n

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5.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span><\/span>Data Analysis<\/p>\n

<\/span><\/p>\n

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

Return of Equity (Axis Bank) = 0.227 + 0.381 \u00d7 Return of NIFTY 50<\/span><\/p>\n

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

Dependent Variable (Y): Return of Axis Bank Ltd.<\/span><\/p>\n

Independent Variable (X): Return of NIFTY 50 Index<\/p>\n

Statistical Result:<\/p>\n

<\/span><\/p>\n

N=48
R Square= 0.0034
F=<\/span>\u00a00.18
P-Value(F-Stats)=<\/span>\u00a00.62
T-stat for Beta=<\/span>\u00a00.43
P Value for beta=<\/span>\u00a00.67<\/span><\/span><\/p>\n

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\u00a0\u00a0\u00a0\u00a0Explanation
\u00a0\u00a0\u00a0\u00a0
A Simple Linear Regression analysis was conducted to examine the relationship between the weekly returns of the NIFTY 50 Index (Independent Variable) and Axis Bank Ltd. (Dependent Variable) for the period from December 1st, 2024, to November 30th, 2025. The analysis, based on 48 weekly observations, yielded a Coefficient of Determination () of 0.0034. This extremely low value indicates that the movement of the NIFTY 50 Index explains only 0.34% of the variation in Axis Bank\u2019s returns. Consequently, 99.66% of the stock’s price fluctuation during this period was driven by idiosyncratic factors unique to the company rather than broad market trends, suggesting a very weak goodness of fit for the model.<\/span><\/span><\/p>\n

The overall statistical significance of the model was tested using Analysis of Variance (ANOVA). The resulting F-statistic was 0.18, with a corresponding P-value of 0.62. Since the P-value is significantly higher than the standard significance level of 0.05, we fail to reject the null hypothesis. This confirms that the regression model is statistically insignificant, meaning that the relationship observed between the index and the stock during this specific 12-month timeframe is likely due to random chance and holds no predictive value.<\/span><\/p>\n

Detailed analysis of the coefficients further supports this lack of correlation. The Intercept (Alpha) was calculated at 0.227, representing the expected return of Axis Bank in a stagnant market, but with a P-value of 0.616, this figure is not statistically different from zero. Similarly, the Slope (Beta) coefficient was 0.381, which theoretically implies that for every 1% rise in the NIFTY 50, Axis Bank rises by 0.38%. However, the P-value for the Beta coefficient was 0.671, and the 95% confidence interval ranged from -1.41 to 2.17. Because this P-value exceeds 0.05 and the confidence interval crosses zero, the Beta is statistically indistinguishable from zero.<\/span><\/p>\n


Conclusion:-
<\/span>The study reveals a distinct anomaly between theoretical expectations and empirical reality. While academic literature consistently characterizes Axis Bank as a “High Beta” stock highly correlated with the Nifty 50, the regression analysis for the period of December 2024 to November 2025 contradicts this, showing a statistically insignificant relationship with a negligible R-squared of 0.0034. This decoupling indicates that during this specific timeframe, the Nifty 50 failed to serve as a reliable predictor, as the bank’s stock price was driven almost entirely by idiosyncratic, company-specific factors rather than broader market sentiment.<\/span><\/p>\n

References:-\u00a0<\/p>\n

Mazgaonkar, S. (2024). Analysing the relationship between Axis Bank stock performance, Nifty Fifty, and Nifty Bank indices: A comparative study.\u00a0<\/span>International Journal of Research in Finance and Management, 7(1), 33\u201340.<\/span><\/p>\n

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National Stock Exchange of India (NSE). (2025).\u00a0<\/span><\/span>Historical Data for Axis Bank and Nifty 50 Index (Dec 2024 \u2013 Nov 2025).<\/p>\n

Chandran, P. (2016). Volatility and return with reference to stocks of Bank Nifty vs. Nifty 50.\u00a0<\/span>International Journal of Research in Commerce & Management, 7(8), 45\u201351.<\/p>\n","protected":false},"excerpt":{"rendered":"

A Study of Relationship Between Axis Bank Ltd. & Nifty 50 Index \u00a0 1.\u00a0\u00a0\u00a0\u00a0\u00a0Introduction Of the Company Axis Bank Ltd.\u00a0is one of India\u2019s premier private sector financial institutions, operating across a wide spectrum of services including retail banking, corporate credit, treasury, and wealth management. It is a major constituent of the\u00a0NIFTY 50 Index\u00a0and holds substantial… Continue reading A Study of Relationship Between Axis Bank Ltd. & Nifty 50 Index<\/span><\/a><\/p>\n","protected":false},"author":140069,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23551","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\/23551","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\/140069"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23551"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23551\/revisions"}],"predecessor-version":[{"id":23552,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23551\/revisions\/23552"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23551"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}