Correlation Between ICICI Bank and Indian Overseas
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By analyzing existing cross correlation between ICICI Bank Limited and Indian Overseas Bank, you can compare the effects of market volatilities on ICICI Bank and Indian Overseas 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 Indian Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Indian Overseas.
Diversification Opportunities for ICICI Bank and Indian Overseas
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ICICI and Indian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Indian Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Overseas Bank 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 Indian Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Overseas Bank has no effect on the direction of ICICI Bank i.e., ICICI Bank and Indian Overseas go up and down completely randomly.
Pair Corralation between ICICI Bank and Indian Overseas
Assuming the 90 days trading horizon ICICI Bank is expected to generate 2.77 times less return on investment than Indian Overseas. But when comparing it to its historical volatility, ICICI Bank Limited is 2.86 times less risky than Indian Overseas. It trades about 0.34 of its potential returns per unit of risk. Indian Overseas Bank is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,932 in Indian Overseas Bank on September 14, 2024 and sell it today you would earn a total of 836.00 from holding Indian Overseas Bank or generate 16.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ICICI Bank Limited vs. Indian Overseas Bank
Performance |
| Timeline |
| ICICI Bank Limited |
| Indian Overseas Bank |
ICICI Bank and Indian Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Indian Overseas
The main advantage of trading using opposite ICICI Bank and Indian Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Indian Overseas 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 Indian Overseas will offset losses from the drop in Indian Overseas' long position.| ICICI Bank vs. Reliance Industries Limited | ICICI Bank vs. State Bank of | ICICI Bank vs. Oil Natural Gas |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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