ANALYSIS OF STOCK PRICE MOVEMENT AND RETURN ON A

STOCK (CAPM MODEL)

MRF
Year Rm Rf Beta R(MRF) Adjusted R Square P-value
2013 0.000296 0.0876 0.868062 0.011814873 0.234896159 2.71783E-16
2014 0.001157 0.08565 0.870679 0.012084054 0.128499709 5.30304E-09
2015 -0.00012 0.0786 1.122325 -0.009745006 0.367492474 2.15613E-26
2016 0.000158 0.0684 0.973559 0.001962037 0.230846794 7.84277E-16
2017 0.00104 0.0627 0.905849 0.006844996 0.104919892 1.1536E-07

From the above table we get the following inferences.

2013

 The value of beta for the year is 0.868062, which is less than 1. It signifies that the stock
is less volatile than the market. Therefore the stock is less risky.
 The return generated by the shares of MRF in this year is 0.011814873, which is less than
the Rf (0.0876).
 The Adjusted R Square value is 0.234896159 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).
Ha: There is a significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).

Here the P-value is 2.71783E-16, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by MRF stock (R-MRF).

2014

 The value of beta for the year is 0.870679037, which is less than 1. It signifies that the
stock is less volatile than the market. Therefore the stock is less risky.
 The return generated by the shares of MRF in this year is 0.012084054, which is less than
the Rf (0.08565).
 The Adjusted R Square value is 0.128499709 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).
Ha: There is a significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).

Here the P-value is 5.30304E-09, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by MRF stock (R-MRF).

2015

 The value of beta for the year is 1.122324764, which is greater than 1. It signifies that the
stock is somewhat volatile than the market. Therefore the stock is moderately risky.
 The return generated by the shares of MRF in the year is -0.009745006, which is less
than the Rf (0.0786).
 The Adjusted R Square value is 0.367492474 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).
Ha: There is a significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).

Here the P-value is 2.15613E-26, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by MRF stock (R-MRF).

2016

 The value of beta for the year is 0.973559046, which is less than 1. It signifies that the
stock is less volatile than the market. Therefore the stock is less risky.
 The return generated by the shares of MRF in the year is 0.001962037, which is less than
the Rf (0.0684).
 The Adjusted R Square value is 0.230846794 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).
Ha: There is a significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).

Here the P-value is 7.84277E-16, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by MRF stock (R-MRF).

2017

 The value of beta for the year is 0.90584901, which is less than 1. It signifies that the
stock is less volatile than the market. Therefore the stock is less risky.
 The return generated by the shares of MRF in the year is 0.006844996, which is less than
the Rf (0.0627).
 The Adjusted R Square value is 0.104919892 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).
Ha: There is a significant relationship between the market return (Rm) and return
generated by MRF stock (R-MRF).

Here the P-value is 1.1536E-07, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by MRF stock (R-MRF).
APOLLO TYRES
Year Rm Rf Beta R(APOLLOTYRE) Adjusted R Square P-value
2013 0.000296 0.0876 0.726935 0.024135787 0.079460832 3.7171E-06
2014 0.001157 0.08565 1.324062 -0.026223429 0.148952608 2.83264E-10
2015 -0.00012 0.0786 1.433432 -0.034234154 0.302733729 3.63146E-21
2016 0.000158 0.0684 1.088893 -0.005908599 0.213103122 1.31628E-14
2017 0.00104 0.0627 1.313159 -0.018269912 0.153090665 1.10641E-10

From the above table we get the following inferences.

2013

 The value of beta for the year is 0.726935326, which is less than 1. It signifies that the
stock is less volatile than the market. Therefore the stock is less risky.
 The return generated by the shares of APOLLOTYRE in this year is 0.024135787, which
is less than the Rf (0.0876).
 The Adjusted R Square value is 0.079460832 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R- APOLLOTYRE).
Ha: There is a significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).

Here the P-value is 3.7171E-06, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by APOLLOTYRE stock (R-APOLLOTYRE).

2014

 The value of beta for the year is 1.324061676, which is greater than 1. It signifies that the
stock is somewhat volatile than the market. Therefore the stock is moderately risky.
 The return generated by the shares of APOLLOTYRE in the year is -0.026223429, which
is less than the Rf (0.08565).
 The Adjusted R Square value is 0.148952608 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).
 Ha: There is a significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).

Here the P-value is 2.83264E-10, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by APOLLOTYRE stock (R-APOLLOTYRE).

2015

 The value of beta for the year is 1.433432088, which is greater than 1. It signifies that the
stock is somewhat volatile than the market. Therefore the stock is moderately risky.
 The return generated by the shares of APOLLOTYRE in the year is -0.034234154, which
is less than the Rf (0.0786).
 The Adjusted R Square value is 0.302733729 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).
Ha: There is a significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).

Here the P-value is 3.63146E-21, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by APOLLOTYRE stock (R-APOLLOTYRE).

2016

 The value of beta for the year is 1.088892623, which is greater than 1. It signifies that the
stock is somewhat volatile than the market. Therefore the stock is moderately risky.
 The return generated by the shares of APOLLOTYRE in the year is -0.005908599, which
is less than the Rf (0.0684).
 The Adjusted R Square value is 0.213103122which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).
Ha: There is a significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).
 Here the P-value is 1.31628E-14, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by APOLLOTYRE stock (R-APOLLOTYRE).

2017

 The value of beta for the year is 1.313159224, which is greater than 1. It signifies that the
stock is somewhat volatile than the market. Therefore the stock is moderately risky.
 The return generated by the shares of APOLLOTYRE in the year is -0.018269912, which
is less than the Rf (0.0627).
 The Adjusted R Square value is 0.153090665 which indicates that the model explains
very less of the variability of the response data around its mean. It depicts that most of the
data points does not fit within the line of regression.
 Ho: There is no significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).
Ha: There is a significant relationship between the market return (Rm) and return
generated by APOLLOTYRE stock (R-APOLLOTYRE).

Here the P-value is 1.10641E-10, which is less than 0.05. Hence we reject the null
hypothesis.
There is a significant relationship between the market return (Rm) and return generated
by APOLLOTYRE stock (R-APOLLOTYRE).