Correlation Between ICICI Bank and RHI MAGNESITA
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By analyzing existing cross correlation between ICICI Bank Limited and RHI MAGNESITA INDIA, you can compare the effects of market volatilities on ICICI Bank and RHI MAGNESITA 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 RHI MAGNESITA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and RHI MAGNESITA.
Diversification Opportunities for ICICI Bank and RHI MAGNESITA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICICI and RHI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and RHI MAGNESITA INDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHI MAGNESITA INDIA 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 RHI MAGNESITA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHI MAGNESITA INDIA has no effect on the direction of ICICI Bank i.e., ICICI Bank and RHI MAGNESITA go up and down completely randomly.
Pair Corralation between ICICI Bank and RHI MAGNESITA
Assuming the 90 days trading horizon ICICI Bank is expected to generate 1.15 times less return on investment than RHI MAGNESITA. But when comparing it to its historical volatility, ICICI Bank Limited is 2.29 times less risky than RHI MAGNESITA. It trades about 0.29 of its potential returns per unit of risk. RHI MAGNESITA INDIA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 51,655 in RHI MAGNESITA INDIA on September 20, 2024 and sell it today you would earn a total of 3,340 from holding RHI MAGNESITA INDIA or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ICICI Bank Limited vs. RHI MAGNESITA INDIA
Performance |
| Timeline |
| ICICI Bank Limited |
| RHI MAGNESITA INDIA |
ICICI Bank and RHI MAGNESITA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and RHI MAGNESITA
The main advantage of trading using opposite ICICI Bank and RHI MAGNESITA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, RHI MAGNESITA 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 RHI MAGNESITA will offset losses from the drop in RHI MAGNESITA's long position.| ICICI Bank vs. Welspun Investments and | ICICI Bank vs. Transport of | ICICI Bank vs. Pilani Investment and | ICICI Bank vs. Shyam Telecom Limited |
| RHI MAGNESITA vs. State Bank of | RHI MAGNESITA vs. Life Insurance | RHI MAGNESITA vs. HDFC Bank Limited | RHI MAGNESITA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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