Correlation Between ICICI Bank and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and ConocoPhillips 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 ICICI Bank and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICICI Bank Limited and ConocoPhillips, you can compare the effects of market volatilities on ICICI Bank and ConocoPhillips 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 ICICI Bank with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and ConocoPhillips.
Diversification Opportunities for ICICI Bank and ConocoPhillips
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ICICI and ConocoPhillips is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and ICICI Bank 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 ICICI Bank Limited are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of ICICI Bank i.e., ICICI Bank and ConocoPhillips go up and down completely randomly.
Pair Corralation between ICICI Bank and ConocoPhillips
Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 0.76 times more return on investment than ConocoPhillips. However, ICICI Bank Limited is 1.32 times less risky than ConocoPhillips. It trades about 0.03 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.0 per unit of risk. If you would invest 16,397 in ICICI Bank Limited on October 16, 2024 and sell it today you would earn a total of 756.00 from holding ICICI Bank Limited or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
ICICI Bank Limited vs. ConocoPhillips
Performance |
| Timeline |
| ICICI Bank Limited |
| ConocoPhillips |
ICICI Bank and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and ConocoPhillips
The main advantage of trading using opposite ICICI Bank and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| ICICI Bank vs. Unity Software | ICICI Bank vs. Cognizant Technology Solutions | ICICI Bank vs. Clover Health Investments, | ICICI Bank vs. Broadcom |
| ConocoPhillips vs. STAG Industrial, | ConocoPhillips vs. Bread Financial Holdings | ConocoPhillips vs. Check Point Software | ConocoPhillips vs. ICICI Bank Limited |
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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