I did the regression analysis on the GDP of India data and the sales of the stock price of the Hero Automobiles. After getting the result I found that the stock price of Hero increases with the increase in GDP.
The regression equation line found was.
Stock Price = 2507 + 24*GDP.
The R2 was found to be 80%, means 80% variation of stock price was explained by the regression equation.
The result is caused by the strong co-relation between demand of automobiles with increase in income which is shown by an increased GDP.
In news these days due to increased projected GDP, sales of automobiles are also increasing and so is the stock price.
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