Correlation Between ICICI Bank and First IC
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and First IC 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 First IC 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 First IC, you can compare the effects of market volatilities on ICICI Bank and First IC 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 First IC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and First IC.
Diversification Opportunities for ICICI Bank and First IC
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ICICI and First is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and First IC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First IC 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 First IC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First IC has no effect on the direction of ICICI Bank i.e., ICICI Bank and First IC go up and down completely randomly.
Pair Corralation between ICICI Bank and First IC
Considering the 90-day investment horizon ICICI Bank Limited is expected to under-perform the First IC. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 1.35 times less risky than First IC. The stock trades about -0.23 of its potential returns per unit of risk. The First IC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 890.00 in First IC on October 26, 2024 and sell it today you would earn a total of 140.00 from holding First IC or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ICICI Bank Limited vs. First IC
Performance |
| Timeline |
| ICICI Bank Limited |
| First IC |
ICICI Bank and First IC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and First IC
The main advantage of trading using opposite ICICI Bank and First IC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, First IC 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 First IC will offset losses from the drop in First IC'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 |
| First IC vs. CCFNB Bancorp | First IC vs. Glen Burnie Bancorp | First IC vs. Main Street Financial | First IC vs. Enterprise Financial Services |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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