Correlation Between ICICI Bank and HEG
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By analyzing existing cross correlation between ICICI Bank Limited and HEG Limited, you can compare the effects of market volatilities on ICICI Bank and HEG 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 HEG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and HEG.
Diversification Opportunities for ICICI Bank and HEG
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICICI and HEG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and HEG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEG 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 HEG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEG Limited has no effect on the direction of ICICI Bank i.e., ICICI Bank and HEG go up and down completely randomly.
Pair Corralation between ICICI Bank and HEG
Assuming the 90 days trading horizon ICICI Bank is expected to generate 388.64 times less return on investment than HEG. But when comparing it to its historical volatility, ICICI Bank Limited is 178.84 times less risky than HEG. It trades about 0.09 of its potential returns per unit of risk. HEG Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 17,353 in HEG Limited on September 16, 2024 and sell it today you would earn a total of 39,477 from holding HEG Limited or generate 227.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.9% |
| Values | Daily Returns |
ICICI Bank Limited vs. HEG Limited
Performance |
| Timeline |
| ICICI Bank Limited |
| HEG Limited |
ICICI Bank and HEG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and HEG
The main advantage of trading using opposite ICICI Bank and HEG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, HEG 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 HEG will offset losses from the drop in HEG's long position.| ICICI Bank vs. Reliance Industries Limited | ICICI Bank vs. State Bank of | ICICI Bank vs. Oil Natural Gas |
| HEG vs. Reliance Industries Limited | HEG vs. Oil Natural Gas | HEG vs. ICICI Bank Limited | HEG vs. Bharti Airtel 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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