Correlation Between ICICI Bank and Mizuho Financial
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Mizuho Financial 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 Mizuho Financial 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 Mizuho Financial Group, you can compare the effects of market volatilities on ICICI Bank and Mizuho Financial 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 Mizuho Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Mizuho Financial.
Diversification Opportunities for ICICI Bank and Mizuho Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICICI and Mizuho is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial 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 Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of ICICI Bank i.e., ICICI Bank and Mizuho Financial go up and down completely randomly.
Pair Corralation between ICICI Bank and Mizuho Financial
Assuming the 90 days trading horizon ICICI Bank Limited is expected to under-perform the Mizuho Financial. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 1.08 times less risky than Mizuho Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Mizuho Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,262 in Mizuho Financial Group on October 19, 2024 and sell it today you would earn a total of 141.00 from holding Mizuho Financial Group or generate 6.23% 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. Mizuho Financial Group
Performance |
| Timeline |
| ICICI Bank Limited |
| Mizuho Financial |
ICICI Bank and Mizuho Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Mizuho Financial
The main advantage of trading using opposite ICICI Bank and Mizuho Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Mizuho Financial 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 Mizuho Financial will offset losses from the drop in Mizuho Financial's long position.| ICICI Bank vs. China Merchants Bank | ICICI Bank vs. HDFC Bank Limited | ICICI Bank vs. PT Bank Central | ICICI Bank vs. DBS Group Holdings |
| Mizuho Financial vs. China Merchants Bank | Mizuho Financial vs. HDFC Bank Limited | Mizuho Financial vs. ICICI Bank Limited | Mizuho Financial vs. PT Bank Central |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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