Classification and Predictive Analysis of the Stocks Listed with NIFTY50

Abstract

Indian stock market has its prominent position in the globe. In 2018, the healthy economic growth in India has supported its stock market and become one of the largest stock market in the world. India's ascent reflects the growing blow of emerging markets. It also indicates its economy is positioned for sustained growth, even if the manufacturing sector is not firing on all cylinders. SENSEX and NIFTY are considered as the barometers of Indian stock market. Approximately 1600 companies are listed on National Stock Exchange of India Ltd. (NSE), from which fifty companies are listed with the prestigious index NIFTY50.The NIFTY50, is the leading index on the NSE, which is commonly known as NIFTY. It is derived from economic research and is created for the interest of investors, who wants to invest and trade in Indian equities. The NIFTY 50 stocks comprises of leading Indian companies from various sectors. The stocks of listed companies are relatively less volatile and offer a rather steady return. The NIFTY 50 covers major sectors of the Indian economy and offers great exposure to the investment managers to Indian stock market in one's competent portfolio. The companies listed with NIFTY50, show significantly diversified behavior with respect to their price movements. Thus, the risk and returns associated with the stocks found to be wide-ranging in nature. Also, the range of the beta factors of these stocks is significantly varied. The present study is an attempt to analysis the fifty stocks of NIFTY50 based on the returns offered by the stocks, risk associated with these stocks and their respective beta factors. The weekly data of past years have been collected and used to calculate the returns, risk and beta factors associated with the fifty stocks listed in NIFTY50. Using cluster analysis, the fifty stocks of NIFTY50 are classified into segments based on their respective returns, risk and beta values. Further for each segment, a predictive model for returns is Proposed.