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Presented By:-Rajiv Ranjan Singh

The document discusses several key financial metrics: R-squared indicates how useful the beta value is, with a value close to 100 indicating beta is more useful. A low R-squared means beta should be ignored. Multiple R should be compared against other companies in the same industry to assess relative financial health. T-stats between -3 and +3 are insignificant, while values outside that range are significant. Beta above 1 means a stock will be more volatile than the market and offer higher return but also higher risk.

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174 views7 pages

Presented By:-Rajiv Ranjan Singh

The document discusses several key financial metrics: R-squared indicates how useful the beta value is, with a value close to 100 indicating beta is more useful. A low R-squared means beta should be ignored. Multiple R should be compared against other companies in the same industry to assess relative financial health. T-stats between -3 and +3 are insignificant, while values outside that range are significant. Beta above 1 means a stock will be more volatile than the market and offer higher return but also higher risk.

Uploaded by

Rajiv Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Presented By:-

Rajiv Ranjan Singh

Meaning Explanation A higher R-squared value will indicate a more useful beta figure. For example, if a fund has an R-squared value of close to 100 but has a beta below 1, it is most likely offering higher risk-adjusted returns. A low R-squared means you should ignore the beta.
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Investors should compare Multiple R for the company being analyzed to that of other same product companies in the industry to get an idea of the company's relative financial health For example, one electronics store's R multiple should be compared to those of other electronics stores, not to those of food manufacturers or healthcare providers.
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t stats is insignificant because its lying between -3 to +3


if t stats is beyond this value(-3 to +3) than its significant

Meaning of beta For example, if a stock's beta is 1.2, it's theoretically 20% more move than the market. a beta of greater than 1, offering the possibility of a higher rate of return, but also posing more risk.
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Thank you
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