Assessing the Price Volatility in the Top 50 Blue Chip Companies of Nifty Index - An Analysis using GARCH and ARCH Model

This research has been conducted to study Nifty 50 index price volatility dynamics through the application of ARCH, GARCH and Heston stochastic volatility modelling approaches. Financial decision-makers including investors along with institutions and policymakers need volatility as a cornerstone for their decisions. The research uses conventional daily closing prices between 2010 and 2025 to demonstrate volatility clustering through standard ARCH and GARCH models. This analysis shows GARCH offers superior results over ARCH when demonstrating volatility persistence but it does not meet emerging market requirements toward fully explaining asymmetry along with memory features typically found in Indian financial markets. The research solves these issues by using the Heston stochastic volatility model that handles mean reversion and stochastic variance evolution along with leverage effects. The Heston model delivers advanced volatility behaviour analysis while maintaining practicality and effectiveness of GARCH models during regular market applications. Due to its complex nature Heston needs advanced skills for its application yet proves better suited for complex modelling situations instead of basic forecasting tasks.