Correlation Between CEAT and ICICI Securities
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By analyzing existing cross correlation between CEAT Limited and ICICI Securities Limited, you can compare the effects of market volatilities on CEAT and ICICI Securities 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 Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEAT and ICICI Securities.
Diversification Opportunities for CEAT and ICICI Securities
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEAT and ICICI is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CEAT Limited and ICICI Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Securities 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 Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Securities has no effect on the direction of CEAT i.e., CEAT and ICICI Securities go up and down completely randomly.
Pair Corralation between CEAT and ICICI Securities
Assuming the 90 days trading horizon CEAT Limited is expected to generate 1.97 times more return on investment than ICICI Securities. However, CEAT is 1.97 times more volatile than ICICI Securities Limited. It trades about 0.17 of its potential returns per unit of risk. ICICI Securities Limited is currently generating about -0.04 per unit of risk. If you would invest 277,485 in CEAT Limited on August 30, 2024 and sell it today you would earn a total of 19,910 from holding CEAT Limited or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CEAT Limited vs. ICICI Securities Limited
Performance |
| Timeline |
| CEAT Limited |
| ICICI Securities |
CEAT and ICICI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEAT and ICICI Securities
The main advantage of trading using opposite CEAT and ICICI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEAT position performs unexpectedly, ICICI Securities 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 Securities will offset losses from the drop in ICICI Securities' long position.| CEAT vs. Pondy Oxides Chemicals | CEAT vs. Tata Chemicals Limited | CEAT vs. Shree Pushkar Chemicals | CEAT vs. Ortel Communications Limited |
| ICICI Securities vs. Sintex Plastics Technology | ICICI Securities vs. Oriental Hotels Limited | ICICI Securities vs. Dev Information Technology | ICICI Securities vs. Hilton Metal Forging |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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