In financial markets, understanding the performance of market indices compared to individual stocks is crucial for investors. Often, there is a disparity between index performance and individual stock performance, prompting curiosity about the underlying reasons. This project aims to delve into the composition of market indices, specifically focusing on Nifty 100, Nifty Mid 150, and Nifty Small 250, to unravel sector-wise weightage, distribution, and outlier identification.
Objectives:
- Analyze the composition of Nifty 100, Nifty Mid 150, and Nifty Small 250 indices.
- Investigate sector-wise weightage and distribution within each index.
- Rank companies within each index based on market capitalization.
- Identify outliers within the indices using appropriate statistical methods.
- Draw valid conclusions regarding the composition, distribution, and outliers of the indices.
Methodology:
- Data Collection: Gather historical market data for the constituents of Nifty 100, Nifty Mid 150, and Nifty Small 250.
- Index Composition Analysis: Determine the sector-wise weightage and overall distribution of companies within each index.
- Market Capitalization Ranking: Rank companies within each index based on their market capitalization.
- Outlier Identification: Employ statistical methods to identify outliers within the indices.
- Power BI Dashboard: Utilize a Power BI file to visualize the entire market distribution in one dashboard, enhancing understanding and insights.
Expected Deliverables:
- Report detailing the composition and distribution of Nifty 100, Nifty Mid 150, and Nifty Small 250.
- Analysis of sector-wise weightage and company ranking based on market capitalization.
- Identification and analysis of outliers within the indices.
- Valid conclusions drawn from the analysis, shedding light on the disparities between index performance and individual stock performance.
- Power BI Dashboard providing comprehensive visualization of market distribution for enhanced insights.
Conclusion:
Through our analysis of the Nifty 100 index, we have uncovered several significant insights into the composition and dynamics of market capitalization across different segments.
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Large Cap Outliers: We observed that the large-cap segment has 8% outliers, representing a substantial proportion of the total market capitalization within the Nifty 100 index, accounting for approximately 30%. This suggests a notable concentration of market value within a select few large-cap companies.
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Mid Cap and Small Cap Stability: Interestingly, we found no outliers within the mid-cap and small-cap segments, indicating a relatively stable distribution of market capitalization within these categories.
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Sector Distribution: Our analysis revealed sector-wise distributions across different market segments. In the mid-cap and small-cap segments, the pharmaceutical sector emerges as the dominant player, with 10 and 61 stocks, respectively. Conversely, in the large-cap segment, the information technology (IT) and public banking sectors share the top position, each boasting 6 companies, closely followed by the private banking sector with 5 companies.
These findings offer valuable insights into the market dynamics and sectoral compositions within the Nifty 100 index. For a more comprehensive and interactive exploration of our analysis, we invite further exploration of our Power BI dashboard, which provides deep insights and visualizations into the underlying trends and patterns driving market capitalization across various segments.
This project serves as a valuable resource for investors seeking to understand and navigate the complexities of the financial markets, enabling informed decision-making and strategic investment strategies.
Link - https://github.com/yasht721/knowyourmarket/blob/main/Knowyourmarket.pbix