Correlation Between CEAT and ICICI Lombard
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By analyzing existing cross correlation between CEAT Limited and ICICI Lombard General, you can compare the effects of market volatilities on CEAT and ICICI Lombard and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CEAT with a short position of ICICI Lombard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEAT and ICICI Lombard.
Diversification Opportunities for CEAT and ICICI Lombard
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CEAT and ICICI is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CEAT Limited and ICICI Lombard General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Lombard General and CEAT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CEAT Limited are associated (or correlated) with ICICI Lombard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Lombard General has no effect on the direction of CEAT i.e., CEAT and ICICI Lombard go up and down completely randomly.
Pair Corralation between CEAT and ICICI Lombard
Assuming the 90 days trading horizon CEAT Limited is expected to generate 1.53 times more return on investment than ICICI Lombard. However, CEAT is 1.53 times more volatile than ICICI Lombard General. It trades about 0.06 of its potential returns per unit of risk. ICICI Lombard General is currently generating about -0.19 per unit of risk. If you would invest 279,565 in CEAT Limited on August 31, 2024 and sell it today you would earn a total of 17,720 from holding CEAT Limited or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
CEAT Limited vs. ICICI Lombard General
Performance |
| Timeline |
| CEAT Limited |
| ICICI Lombard General |
CEAT and ICICI Lombard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEAT and ICICI Lombard
The main advantage of trading using opposite CEAT and ICICI Lombard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEAT position performs unexpectedly, ICICI Lombard can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ICICI Lombard will offset losses from the drop in ICICI Lombard's long position.| CEAT vs. EMBASSY OFFICE PARKS | CEAT vs. Repco Home Finance | CEAT vs. Reliance Home Finance | CEAT vs. SIL Investments Limited |
| ICICI Lombard vs. Kavveri Telecom Products | ICICI Lombard vs. Manaksia Coated Metals | ICICI Lombard vs. Uniinfo Telecom Services | ICICI Lombard vs. Nahar Industrial Enterprises |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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