A Comparative Study of Metal and Electricity Industries in Indian Context

Abstract

There are many studies has been conducted on relationship between different industries on companies level as well as industry
level. In this study I tried to find out relationship between metal industry and electricity industry on firm level and industry level.
This research paper attempts to examineempirical status of selected companies from metal and electricity industries in India by
using monthly data time series over a nine year period from January 2002 to December 2010 for stocks of metal industry’s 79
Companies and electricity industries’s 7 Companies total 86 Indian companies of both industries. The study employed the three
steps in the first step descriptive study, in the second step augmented dickey-fuller unit root test for checking stationery and in
the third step granger causality tests for testing the causality between stock return and trading volume. From analysis result and
discussions, we can say that the empirical result of granger causality test on industries level in India, Both industries shows high degree Return cause volume but not volume cause return.Hence, we can say that both of the industries show one side causation return
cause volume. It means that the variables trading volume and stock return are not mutually granger cause to each other, in case of
empirical analysis of two selected industries from India. Hence changes in Stock Return and trading volume do not reflect the variable each other on industries level. Therefore, there is randomness in the behaviour of stock return and trading volume changes in
this study of two industries in India.But in case of empirical analysis of two industries at firm level the result shows very low degree
relationship between stock return and trading volume for all 86 companies from metal and electricity industries.