Correlation Between ICICI Bank and PT Bank
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and PT 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 PT 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 PT Bank Central, you can compare the effects of market volatilities on ICICI Bank and PT 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and PT Bank.
Diversification Opportunities for ICICI Bank and PT Bank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ICICI and BZG2 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of ICICI Bank i.e., ICICI Bank and PT Bank go up and down completely randomly.
Pair Corralation between ICICI Bank and PT Bank
Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 0.51 times more return on investment than PT Bank. However, ICICI Bank Limited is 1.96 times less risky than PT Bank. It trades about 0.06 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.03 per unit of risk. If you would invest 1,914 in ICICI Bank Limited on September 3, 2024 and sell it today you would earn a total of 1,006 from holding ICICI Bank Limited or generate 52.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. PT Bank Central
Performance |
| Timeline |
| ICICI Bank Limited |
| PT Bank Central |
ICICI Bank and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and PT Bank
The main advantage of trading using opposite ICICI Bank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, PT 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 PT Bank will offset losses from the drop in PT Bank's long position.| ICICI Bank vs. China Merchants Bank | ICICI Bank vs. PT Bank Central | ICICI Bank vs. DBS Group Holdings | ICICI Bank vs. State Bank of |
| PT Bank vs. Vulcan Materials | PT Bank vs. RYU Apparel | PT Bank vs. THORNEY TECHS LTD | PT Bank vs. Hyster Yale Materials Handling |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |