Correlation Between ICICI Bank and Imagicaaworld Entertainment

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Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment 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 Imagicaaworld Entertainment Limited, you can compare the effects of market volatilities on ICICI Bank and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Imagicaaworld Entertainment.

Diversification Opportunities for ICICI Bank and Imagicaaworld Entertainment

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between ICICI and Imagicaaworld is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Imagicaaworld Entertainment Li in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imagicaaworld Entertainment 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 Imagicaaworld Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imagicaaworld Entertainment has no effect on the direction of ICICI Bank i.e., ICICI Bank and Imagicaaworld Entertainment go up and down completely randomly.

Pair Corralation between ICICI Bank and Imagicaaworld Entertainment

Assuming the 90 days trading horizon ICICI Bank is expected to generate 2.18 times less return on investment than Imagicaaworld Entertainment. But when comparing it to its historical volatility, ICICI Bank Limited is 3.01 times less risky than Imagicaaworld Entertainment. It trades about 0.09 of its potential returns per unit of risk. Imagicaaworld Entertainment Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,525  in Imagicaaworld Entertainment Limited on August 27, 2024 and sell it today you would earn a total of  3,675  from holding Imagicaaworld Entertainment Limited or generate 104.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.78%
ValuesDaily Returns

ICICI Bank Limited  vs.  Imagicaaworld Entertainment Li

 Performance 
       Timeline  
ICICI Bank Limited 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Bank Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ICICI Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Imagicaaworld Entertainment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Imagicaaworld Entertainment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

ICICI Bank and Imagicaaworld Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ICICI Bank and Imagicaaworld Entertainment

The main advantage of trading using opposite ICICI Bank and Imagicaaworld Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Imagicaaworld Entertainment 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 Imagicaaworld Entertainment will offset losses from the drop in Imagicaaworld Entertainment's long position.
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The idea behind ICICI Bank Limited and Imagicaaworld Entertainment Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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