1) India vs China

Pre Financial Crisis:

Here, a regression analysis has been made to view the predictability of the yields of China
Governments 10 year bond taking the yields of 10 year G-Secs of India as independent
variables.
SUMMARY OUTPUT
Regression Statistics

Multiple R
R Square
Adjusted R
Square
Standard Error
Observations

Analysis
0.0633
R
square
value
signifies
how well the regression line
0.0040
approximates the real data. This number tells you how
-0.0121 much of the output variables variance is explained by the
0.6402 input variables variance. Ideally we would like to see this
at least 0.6 (60%) or 0.7 (70%).But, here it is only .
4%.So,variations in Yields of Chinese G secs are not well
64 Influenced by that of India.

ANOVA
df
Regression
Residual
Total

SS

MS
0.10
0.40

Significanc
eF
0.62

1
0.10
0.25
62
25.40
63
25.51
Analysis: Signifacance F indicates the probability that the Regression output could have

been obtained by chance. A small Significance of F confirms the validity of the Regression
output. For example, if Significance of F = 0.030, there is only a 3% chance that the
Regression output was merely a chance occurrence. As here the no is 0.62,it seems that
mainly the correlation is largely by chance.
16
14
12
10
8
6
4
2
0

China 10Y G Sec Yield

Ind 10Y G Sec Yield

Chart Showing 10 year G-Sec yield of India and that of China during
pre-Financial crisis period

Post Financial Crisis

SUMMARY
OUTPUT
Regression Statistics
Multiple R
0.76
R Square
0.57
Adjusted R
Square
0.57
Standard Error
0.26
Observations
74

Analysis: R square value of 0.57 signifies that variance

of yield of Russian G sec bonds are explained by that of

Indian G-sec yield with a probability of 57%.

ANOVA
df

SS

MS

Significa
nce F
5.57364E15

Regression
1
6.44
6.44
97.02
Residual
72
4.78
0.07
Total
73
11.22
Analysis: Here the significance of F is pretty low, so there is negligible
probability that the correlation between these two data are due to merely by
chance.

Chart Title

Yield

16
14
12
10
8
6
4
2
0

China 10Y G Sec yield

Ind 10Y G sec Yield

Chart Showing 10 year G-Sec yield of India and that of China during
Post-Financial crisis period

2) India vs Russia

Pre-Financial crisis

Same Strategy has been used to establish a relationship between debt market of two countries.
SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

0.83
0.68
0.68
0.86
65.00

Analysis: R square value

of 0.68 signifies that
variance of yield of
Russian G sec bonds are
explained by that of
Indian G-sec yield with
a probability of 68%.

ANOVA
df
Regression
Residual
Total

1
63
64

SS
99.83
46.18
146.01

MS
99.83
0.73

F
136.20

Significance
F
2.14534E-17

Analysis: Significance of F indicates here that there is very less amount of probability that
the Regression output was merely a chance occurrence.

20
18
16
14
12
10
8
6
4
2
0

Russia 10Y G sec Yield

Ind 10Yr G Sec yield

Chart Showing 10 year G-Sec yield of India and that of Russia during PreFinancial crisis period

Post Financial Crisis

SUMMARY
OUTPUT
Regression Statistics
Multiple R
0.49
R Square
0.24
Adjusted R
Square
0.22
Standard Error
1.30
Observations
73

Analysis: R square value of 0.24 signifies that variance

of yield of Russian G sec bonds are explained by that of
Indian G-sec yield with a probability of 24% post-crisis
period.
As predictability is considerably low we reject the result
the chance of any relation between two data.

25
20
15
10
5

Rus 10 Y G sec yield

Ind 10Y G-sec yield

Chart Showing 10 year G-Sec yield of India and that of Russia during
Post-Financial crisis period