Page 332 - IMDR JOURNAL 2023-24

IMDR’s Journal of Management Development & Research 2023-24

The aim of this paper is to delve into the long-term correlation between the Nasdaq index and
the Nifty index, specifically within the Indian context. By utilizing historical price data and

employing statistical analysis techniques, we seek to assess the degree of correlation between

these two indices over an extended period. This analysis not only sheds light on the dynamics
of these major stock market indices but also provides valuable insights for investors seeking

to diversify their portfolios and policymakers tasked with formulating economic policies.

Through this investigation, we aim to address pertinent questions such as the extent to which
movements in the Nasdaq index impact the Nifty index and vice versa, as well as identifying

any underlying trends or patterns in their correlation. Furthermore, by examining the
historical relationship between these indices, we aim to provide actionable insights for

investors looking to capitalize on potential market trends and policymakers aiming to better
understand the implications of global market dynamics on the Indian economy.

In summary, this study holds significance in contributing to the body of knowledge

surrounding the interplay between major stock market indices and its implications for
investors and policymakers operating within the Indian financial landscape. By providing a

comprehensive analysis of the long-term correlation between the Nasdaq index and the Nifty

index, we aim to equip stakeholders with valuable insights to navigate the complexities of
today's interconnected financial markets.

Objectives:

1. To examine the long-term correlation between the Nasdaq index and the Nifty index
within the Indian context.

2. To analyse historical price data of the Nasdaq and Nifty indices over a specified time

period (11 years).
3. To apply statistical analysis techniques to assess the strength and stability of the

correlation between the two indices.

4. To provide insights for investors on potential portfolio diversification strategies based
on the correlation between Nasdaq and Nifty indices.

5. To offer recommendations for policymakers based on the implications of the Nasdaq-

Nifty correlation for the Indian economy and financial markets.

Literature review
The literature on the correlation between the Nasdaq index and the Nifty index within the

Indian context has witnessed significant growth in recent years. Several studies have

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