Beta Value of Honda

Atlas Pakistan
Limited
ATLAS PAKISTAN LIMITED

CALCULATION OF BETA

Operating Dates Market Index (X) Honda Atlas Cars (Pakistan)

limited (Y)
07/04/2015 31,600.73 210.59
06/04/2015 31,752.17 212.82
03/04/2015 31,413.96 202.69
02/04/2015 31,132.25 193.04
01/04/2015 30,605.06 188.77
31/03/2015 30,233.87 183.43
30/03/2015 28,927.04 174.70
27/03/2015 29,957.83 183.89
26/03/2015 30,678.97 185.24
25/03/2015 31,086.51 188.40
∑(y)= 307,388.39 ∑(X)= 1923.57

x̄ = 307,388.39/10 = 30,738.839
Ῡ = 1923.57/10 = 192.357

Deviations:

Standard deviation of Honda Atlas Cars (Pakistan) Limited:

Y (Y- Ῡ) (Y- Ῡ)²

210.59 18.23 332.33
212.82 20.46 418.611
202.69 10.33 106.70
193.04 0.68 0.4624
188.77 -3.58 12.8164
183.43 -8.92 79.566
174.70 -17.65 311.522
183.89 -8.46 71.571
185.24 -7.11 50.55
188.40 -3.95 15.602
∑(Y- Ῡ)²= 1399.73

Standard deviation of Y = (∑(Y- Ῡ) ²/n) ½

σi = (1399.73/10) ½

σi = 11.83

Standard deviation of KSE-100 (X):

1
Standard deviation of X= (∑ (x- x̄) ²/n) ½

x (x- x̄) (x- x̄) ²

31,600.73 861.891 742856.09
31,752.17 1013.331 1,026,839.71
31,413.96 675.121 455,788.36
31,132.25 393.411 154,772.21
30,605.06 -133.779 17,896.82
30,233.87 -504.969 254,993.69
28,927.04 -1,811.799 3,282,615.61
29,957.83 -781.009 609,975.05
30,678.97 -59.869 3,584.29
31,086.51 347.671 120,875.12
∑(x- x̄) ²= 6,670,196.95

σm= (6,670,196.95/10)½

σm = 816.71

Co-relation:

Co-relation= ∑(x- x̄) (Y- Ῡ)/ (∑(x- x̄) ²∑(Y- Ῡ) ²)½

(x- x̄) (Y- Ῡ) (x- x̄) (Y- Ῡ)

861.891 18.23 15712.2729

1013.331 20.46 20732.7523

675.121 10.33 6973.99993

2
393.411 0.68 459.08228

-133.779 -3.58 478.92882

-504.969 -8.92 4504.32348

-1,811.799 -17.65 31978.2524

-781.009 -8.46 6607.33614

-59.869 -7.11 425.66859

347.671 -3.95 -1373.30045

∑(x- x̄) (Y- Ῡ)=

86499.3163

∑(x- x̄) (Y- Ῡ) =

86499.3163

(∑(x- x̄) ²∑(Y- Ῡ) ²)½= (6,670,196.95*1399.73) ½

= 96,625.43

r = ∑(x- x̄) (Y- Ῡ)/ (∑(x- x̄) ²∑(Y- Ῡ) ²)½

r = 86499.3163/96,625.43

3
r = 0.895

BETA:

β= r (σi) (σm) / σ²m

β= (0.895) (11.83) (816.71)/ (816.71)²

β = 8647.20/667,015.22

β= 0.012

Interpretation:

As beta of Atlas Honda is less than 1 it means that it has below average risk. Variability in
returns of Atlas Honda is comparatively lesser than the market variability.

References:

http://www.ksestocks.com/MarketSummary#