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- Title
FORECASTING OF P/E RATIO FOR THE INDIAN EQUITY MARKET STOCK INDEX NIFTY 50.
- Authors
Goud, R. Gautham; Reddy, M. Krishna
- Abstract
Political factors, interrelated economic factors and many uncertainties affect the stock markets both locally and globally. The forecasting of stock market will be fruitful only when best results are achieved with minimum data. But in general, the data or information about the stock market will be incomplete, uncertain, vague and complex in nature which makes the prediction of economic performance and the analysis of stock market a challengeable task. The modelling helps in identifying and classifying the high-performance securities and also to make decisions about the investment in stock market. Market value of a stock evaluated using the ratio of the present price per share relative to its earnings per share. This ratio is known as price to earnings ratio, abbreviated as P/E ratio. This ratio affects the valuation of the companies. Therefore, understanding the movement of the P/E ratio plays a key role in understanding the behavior of the stock market. It is proposed to examine the existence of P/E ratio for the Indian equity market stock index NIFTY 50 and also to build a predictive model using the ARIMA model. Among the various models considered ARIMA (1,1,1) is optimum.
- Subjects
STOCK exchanges; ECONOMIC forecasting; STOCK price indexes; EARNINGS per share; DECISION making in investments
- Publication
International Journal of Agricultural & Statistical Sciences, 2020, Vol 16, Issue 2, p819
- ISSN
0973-1903
- Publication type
Article