Correlation Between ICICI Bank and JB Hunt
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and JB Hunt 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 JB Hunt 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 JB Hunt Transport, you can compare the effects of market volatilities on ICICI Bank and JB Hunt 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 JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and JB Hunt.
Diversification Opportunities for ICICI Bank and JB Hunt
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICICI and J1BH34 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport 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 JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of ICICI Bank i.e., ICICI Bank and JB Hunt go up and down completely randomly.
Pair Corralation between ICICI Bank and JB Hunt
Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 68.62 times more return on investment than JB Hunt. However, ICICI Bank is 68.62 times more volatile than JB Hunt Transport. It trades about 0.09 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.13 per unit of risk. If you would invest 16,190 in ICICI Bank Limited on October 14, 2024 and sell it today you would earn a total of 1,355 from holding ICICI Bank Limited or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. JB Hunt Transport
Performance |
| Timeline |
| ICICI Bank Limited |
| JB Hunt Transport |
ICICI Bank and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and JB Hunt
The main advantage of trading using opposite ICICI Bank and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, JB Hunt 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 JB Hunt will offset losses from the drop in JB Hunt's long position.| ICICI Bank vs. Taiwan Semiconductor Manufacturing | ICICI Bank vs. Apple Inc | ICICI Bank vs. Alibaba Group Holding | ICICI Bank vs. Banco Santander Chile |
| JB Hunt vs. Synchrony Financial | JB Hunt vs. ICICI Bank Limited | JB Hunt vs. Ameriprise Financial | JB Hunt vs. Bank of America |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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