Correlation Between ICICI Bank and Alpha Bank
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Alpha 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 ICICI Bank and Alpha Bank 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 Alpha Bank SA, you can compare the effects of market volatilities on ICICI Bank and Alpha 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 ICICI Bank with a short position of Alpha Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Alpha Bank.
Diversification Opportunities for ICICI Bank and Alpha Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICICI and Alpha is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Alpha Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Bank SA 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 Alpha Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Bank SA has no effect on the direction of ICICI Bank i.e., ICICI Bank and Alpha Bank go up and down completely randomly.
Pair Corralation between ICICI Bank and Alpha Bank
Considering the 90-day investment horizon ICICI Bank Limited is expected to generate 0.3 times more return on investment than Alpha Bank. However, ICICI Bank Limited is 3.28 times less risky than Alpha Bank. It trades about 0.02 of its potential returns per unit of risk. Alpha Bank SA is currently generating about -0.04 per unit of risk. If you would invest 3,041 in ICICI Bank Limited on September 1, 2024 and sell it today you would earn a total of 14.00 from holding ICICI Bank Limited or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. Alpha Bank SA
Performance |
| Timeline |
| ICICI Bank Limited |
| Alpha Bank SA |
ICICI Bank and Alpha Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Alpha Bank
The main advantage of trading using opposite ICICI Bank and Alpha Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Alpha 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 Alpha Bank will offset losses from the drop in Alpha Bank's long position.| ICICI Bank vs. US Bancorp | ICICI Bank vs. US Bancorp | ICICI Bank vs. KB Financial Group | ICICI Bank vs. Itau Unibanco Banco |
| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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