Correlation Between ICICI Bank and Bombay Burmah
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By analyzing existing cross correlation between ICICI Bank Limited and Bombay Burmah Trading, you can compare the effects of market volatilities on ICICI Bank and Bombay Burmah 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 Bombay Burmah. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Bombay Burmah.
Diversification Opportunities for ICICI Bank and Bombay Burmah
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICICI and Bombay is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Bombay Burmah Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombay Burmah Trading 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 Bombay Burmah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombay Burmah Trading has no effect on the direction of ICICI Bank i.e., ICICI Bank and Bombay Burmah go up and down completely randomly.
Pair Corralation between ICICI Bank and Bombay Burmah
Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 0.54 times more return on investment than Bombay Burmah. However, ICICI Bank Limited is 1.85 times less risky than Bombay Burmah. It trades about 0.26 of its potential returns per unit of risk. Bombay Burmah Trading is currently generating about -0.34 per unit of risk. If you would invest 126,900 in ICICI Bank Limited on September 13, 2024 and sell it today you would earn a total of 5,850 from holding ICICI Bank Limited or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ICICI Bank Limited vs. Bombay Burmah Trading
Performance |
| Timeline |
| ICICI Bank Limited |
| Bombay Burmah Trading |
ICICI Bank and Bombay Burmah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Bombay Burmah
The main advantage of trading using opposite ICICI Bank and Bombay Burmah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Bombay Burmah 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 Bombay Burmah will offset losses from the drop in Bombay Burmah's long position.| ICICI Bank vs. Reliance Industries Limited | ICICI Bank vs. State Bank of | ICICI Bank vs. Oil Natural Gas |
| Bombay Burmah vs. State Bank of | Bombay Burmah vs. Life Insurance | Bombay Burmah vs. HDFC Bank Limited | Bombay Burmah vs. ICICI Bank Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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