Correlation Between ICICI Bank and HCL Technologies
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By analyzing existing cross correlation between ICICI Bank Limited and HCL Technologies Limited, you can compare the effects of market volatilities on ICICI Bank and HCL Technologies 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 HCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and HCL Technologies.
Diversification Opportunities for ICICI Bank and HCL Technologies
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICICI and HCL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and HCL Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCL Technologies 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 HCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCL Technologies has no effect on the direction of ICICI Bank i.e., ICICI Bank and HCL Technologies go up and down completely randomly.
Pair Corralation between ICICI Bank and HCL Technologies
Assuming the 90 days trading horizon ICICI Bank Limited is expected to under-perform the HCL Technologies. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 1.41 times less risky than HCL Technologies. The stock trades about -0.33 of its potential returns per unit of risk. The HCL Technologies Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 193,620 in HCL Technologies Limited on October 13, 2024 and sell it today you would earn a total of 5,890 from holding HCL Technologies Limited or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ICICI Bank Limited vs. HCL Technologies Limited
Performance |
| Timeline |
| ICICI Bank Limited |
| HCL Technologies |
ICICI Bank and HCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and HCL Technologies
The main advantage of trading using opposite ICICI Bank and HCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, HCL Technologies 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 HCL Technologies will offset losses from the drop in HCL Technologies' long position.| ICICI Bank vs. California Software | ICICI Bank vs. Sonata Software Limited | ICICI Bank vs. Le Travenues Technology | ICICI Bank vs. Sasken Technologies Limited |
| HCL Technologies vs. Viceroy Hotels Limited | HCL Technologies vs. Asian Hotels Limited | HCL Technologies vs. IOL Chemicals and | HCL Technologies vs. TECIL Chemicals and |
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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