A Quantitative Validation of the “Own Calculations” Model For Equilibrium-Based Trading Decisions Using Nifty 50 Index
Title
A Quantitative Validation of the “Own Calculations” Model For Equilibrium-Based Trading Decisions Using Nifty 50 Index
Authors
Sulaiman Sheik Abdullah
Keywords
Nifty 50 | Trading
Publication Details
Vol: 11; No: 4; Dec. 25 | ISSN: 2455-3921
Abstract
The study presents a novel, data-driven trading framework termed the “Own Calculations” model, developed to forecast equilibrium values in the Nifty 50 Index before market opening and validated through empirical and statistical testing. The model operates on the principles of mean reversion and statistical agreement, using daily Open, High, Low, and Close (OHLC) data to identify deviation-based trading opportunities. Data were collected for twenty-two trading sessions between 22 September and 23 October 2025, and analyzed using the Bland–Altman test, Correlation, and Regression analysis to assess accuracy and predictive strength. The findings reveal a strong positive correlation (r = 0.978, p < 0.01) and an R² value of 0.957, indicating that the model’s derived equilibrium values explain over 95% of the variation in actual market averages. The Bland–Altman test further confirmed consistency, showing a mean bias of −31.85 and limits of agreement within acceptable statistical boundaries (−194.15 to +130.46). These results validate that the “Own Calculations” framework effectively mirrors real market behaviour, enabling traders to identify overbought and oversold zones based on significant deviations. From a strategic perspective, the study highlights that applying a deviation threshold of ±80 points improves trade accuracy by filtering market noise and reducing overtrading. When integrated with option strategies particularly In-the-Money (ITM) options and Breakeven (BEP) levels the model enhances decision-making consistency and capital efficiency. The research contributes to quantitative finance by offering a statistically validated, practically applicable trading system that bridges analytical modelling and real-world execution by the researcher.
Corresponding Author
Dr. Sulaiman Sheik Abdullah, Assistant Professor and Research Supervisor, PG and Research Department of Commerce, Pasumpon Muthuramalinga Thevar College, Melaneelithanallur, Tenkasi District, Tamil Nadu, India.
