Correlation Between AGRICUL BK and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK 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 AGRICUL BK and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and ICICI Bank Limited, you can compare the effects of market volatilities on AGRICUL BK 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 AGRICUL BK with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and ICICI Bank.
Diversification Opportunities for AGRICUL BK and ICICI Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICUL and ICICI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H 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 AGRICUL BK 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 AGRICUL BK CHINA H 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 AGRICUL BK i.e., AGRICUL BK and ICICI Bank go up and down completely randomly.
Pair Corralation between AGRICUL BK and ICICI Bank
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 17.13 times less return on investment than ICICI Bank. In addition to that, AGRICUL BK is 1.17 times more volatile than ICICI Bank Limited. It trades about 0.01 of its total potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.19 per unit of volatility. If you would invest 2,720 in ICICI Bank Limited on August 26, 2024 and sell it today you would earn a total of 200.00 from holding ICICI Bank Limited or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. ICICI Bank Limited
Performance |
| Timeline |
| AGRICUL BK CHINA |
| ICICI Bank Limited |
AGRICUL BK and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and ICICI Bank
The main advantage of trading using opposite AGRICUL BK and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK 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.| AGRICUL BK vs. Strategic Investments AS | AGRICUL BK vs. Apollo Investment Corp | AGRICUL BK vs. REGAL ASIAN INVESTMENTS | AGRICUL BK vs. HK Electric Investments |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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