Correlation Between ICICI Bank and ADF Foods
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By analyzing existing cross correlation between ICICI Bank Limited and ADF Foods Limited, you can compare the effects of market volatilities on ICICI Bank and ADF Foods 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 ADF Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and ADF Foods.
Diversification Opportunities for ICICI Bank and ADF Foods
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICICI and ADF is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and ADF Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Foods Limited 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 ADF Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Foods Limited has no effect on the direction of ICICI Bank i.e., ICICI Bank and ADF Foods go up and down completely randomly.
Pair Corralation between ICICI Bank and ADF Foods
Assuming the 90 days trading horizon ICICI Bank is expected to generate 1.92 times less return on investment than ADF Foods. But when comparing it to its historical volatility, ICICI Bank Limited is 2.88 times less risky than ADF Foods. It trades about 0.07 of its potential returns per unit of risk. ADF Foods Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,265 in ADF Foods Limited on November 28, 2024 and sell it today you would earn a total of 9,635 from holding ADF Foods Limited or generate 67.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
ICICI Bank Limited vs. ADF Foods Limited
Performance |
| Timeline |
| ICICI Bank Limited |
| ADF Foods Limited |
ICICI Bank and ADF Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and ADF Foods
The main advantage of trading using opposite ICICI Bank and ADF Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, ADF Foods 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 ADF Foods will offset losses from the drop in ADF Foods' long position.| ICICI Bank vs. Yatra Online Limited | ICICI Bank vs. LLOYDS METALS AND | ICICI Bank vs. Hilton Metal Forging | ICICI Bank vs. Praxis Home Retail |
| ADF Foods vs. Bikaji Foods International | ADF Foods vs. EMBASSY OFFICE PARKS | ADF Foods vs. Kamat Hotels Limited | ADF Foods vs. Juniper Hotels |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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