Correlation Between Hi Tech and ICICI Bank
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By analyzing existing cross correlation between Hi Tech Pipes Limited and ICICI Bank Limited, you can compare the effects of market volatilities on Hi Tech 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 Hi Tech with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Tech and ICICI Bank.
Diversification Opportunities for Hi Tech and ICICI Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HITECH and ICICI is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hi Tech Pipes Limited 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 Hi Tech 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 Hi Tech Pipes Limited 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 Hi Tech i.e., Hi Tech and ICICI Bank go up and down completely randomly.
Pair Corralation between Hi Tech and ICICI Bank
Assuming the 90 days trading horizon Hi Tech is expected to generate 2.75 times less return on investment than ICICI Bank. In addition to that, Hi Tech is 2.35 times more volatile than ICICI Bank Limited. It trades about 0.07 of its total potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.44 per unit of volatility. If you would invest 125,225 in ICICI Bank Limited on September 18, 2024 and sell it today you would earn a total of 9,385 from holding ICICI Bank Limited or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hi Tech Pipes Limited vs. ICICI Bank Limited
Performance |
| Timeline |
| Hi Tech Pipes |
| ICICI Bank Limited |
Hi Tech and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Tech and ICICI Bank
The main advantage of trading using opposite Hi Tech and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Tech 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.| Hi Tech vs. NMDC Limited | Hi Tech vs. Embassy Office Parks | Hi Tech vs. Gujarat Narmada Valley | Hi Tech vs. Gujarat Alkalies and |
| ICICI Bank vs. Pritish Nandy Communications | ICICI Bank vs. NRB Industrial Bearings | ICICI Bank vs. Hi Tech Pipes Limited | ICICI Bank vs. Ankit Metal Power |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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