Correlation Between ICICI Bank and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on ICICI Bank and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Fresenius Medical.
Diversification Opportunities for ICICI Bank and Fresenius Medical
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICICI and Fresenius is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of ICICI Bank i.e., ICICI Bank and Fresenius Medical go up and down completely randomly.
Pair Corralation between ICICI Bank and Fresenius Medical
Assuming the 90 days trading horizon ICICI Bank Limited is expected to under-perform the Fresenius Medical. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 2.91 times less risky than Fresenius Medical. The stock trades about -0.2 of its potential returns per unit of risk. The Fresenius Medical Care is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10,945 in Fresenius Medical Care on October 30, 2024 and sell it today you would earn a total of 2,744 from holding Fresenius Medical Care or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. Fresenius Medical Care
Performance |
| Timeline |
| ICICI Bank Limited |
| Fresenius Medical Care |
ICICI Bank and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Fresenius Medical
The main advantage of trading using opposite ICICI Bank and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| ICICI Bank vs. Patria Investments Limited | ICICI Bank vs. Ryanair Holdings plc | ICICI Bank vs. TechnipFMC plc | ICICI Bank vs. G2D Investments |
| Fresenius Medical vs. Arrow Electronics, | Fresenius Medical vs. Align Technology | Fresenius Medical vs. Fair Isaac | Fresenius Medical vs. Guidewire Software, |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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