Correlation Between DBS Group and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both DBS Group and ICICI Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DBS Group and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBS Group Holdings and ICICI Bank Limited, you can compare the effects of market volatilities on DBS Group and ICICI Bank 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 DBS Group with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and ICICI Bank.
Diversification Opportunities for DBS Group and ICICI Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DBS and ICICI is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and ICICI Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Bank Limited and DBS Group 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 DBS Group Holdings are associated (or correlated) with ICICI Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Bank Limited has no effect on the direction of DBS Group i.e., DBS Group and ICICI Bank go up and down completely randomly.
Pair Corralation between DBS Group and ICICI Bank
Assuming the 90 days trading horizon DBS Group Holdings is expected to generate 1.25 times more return on investment than ICICI Bank. However, DBS Group is 1.25 times more volatile than ICICI Bank Limited. It trades about 0.23 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.19 per unit of risk. If you would invest 2,692 in DBS Group Holdings on August 25, 2024 and sell it today you would earn a total of 300.00 from holding DBS Group Holdings or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBS Group Holdings vs. ICICI Bank Limited
Performance |
| Timeline |
| DBS Group Holdings |
| ICICI Bank Limited |
DBS Group and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBS Group and ICICI Bank
The main advantage of trading using opposite DBS Group and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group position performs unexpectedly, ICICI Bank 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 Bank will offset losses from the drop in ICICI Bank's long position.| DBS Group vs. ARDAGH METAL PACDL 0001 | DBS Group vs. LION ONE METALS | DBS Group vs. Corporate Travel Management | DBS Group vs. VARIOUS EATERIES LS |
| ICICI Bank vs. HDFC Bank Limited | ICICI Bank vs. PT Bank Central | ICICI Bank vs. DBS Group Holdings | ICICI Bank vs. State Bank of |
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 CEOs Directory module to screen CEOs from public companies around the world.
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