Correlation Between Hyundai and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both Hyundai 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 Hyundai and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and ICICI Bank Limited, you can compare the effects of market volatilities on Hyundai 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 Hyundai with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and ICICI Bank.
Diversification Opportunities for Hyundai and ICICI Bank
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and ICICI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor 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 Hyundai 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 Hyundai Motor 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 Hyundai i.e., Hyundai and ICICI Bank go up and down completely randomly.
Pair Corralation between Hyundai and ICICI Bank
Assuming the 90 days horizon Hyundai Motor is expected to under-perform the ICICI Bank. In addition to that, Hyundai is 1.43 times more volatile than ICICI Bank Limited. It trades about -0.02 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 25, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. ICICI Bank Limited
Performance |
| Timeline |
| Hyundai Motor |
| ICICI Bank Limited |
Hyundai and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and ICICI Bank
The main advantage of trading using opposite Hyundai and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai 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.| Hyundai vs. Tesla Inc | Hyundai vs. BYD Company Limited | Hyundai vs. Superior Plus Corp | Hyundai vs. NMI Holdings |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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