Correlation Between ICICI Bank and Sonata Software
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By analyzing existing cross correlation between ICICI Bank Limited and Sonata Software Limited, you can compare the effects of market volatilities on ICICI Bank and Sonata Software 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 Sonata Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Sonata Software.
Diversification Opportunities for ICICI Bank and Sonata Software
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICICI and Sonata is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Sonata Software Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonata Software 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 Sonata Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonata Software has no effect on the direction of ICICI Bank i.e., ICICI Bank and Sonata Software go up and down completely randomly.
Pair Corralation between ICICI Bank and Sonata Software
Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 0.47 times more return on investment than Sonata Software. However, ICICI Bank Limited is 2.13 times less risky than Sonata Software. It trades about 0.09 of its potential returns per unit of risk. Sonata Software Limited is currently generating about 0.04 per unit of risk. If you would invest 93,178 in ICICI Bank Limited on September 26, 2024 and sell it today you would earn a total of 36,547 from holding ICICI Bank Limited or generate 39.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. Sonata Software Limited
Performance |
| Timeline |
| ICICI Bank Limited |
| Sonata Software |
ICICI Bank and Sonata Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Sonata Software
The main advantage of trading using opposite ICICI Bank and Sonata Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Sonata Software 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 Sonata Software will offset losses from the drop in Sonata Software's long position.| ICICI Bank vs. Kingfa Science Technology | ICICI Bank vs. Rico Auto Industries | ICICI Bank vs. GACM Technologies Limited | ICICI Bank vs. COSMO FIRST LIMITED |
| Sonata Software vs. State Bank of | Sonata Software vs. Life Insurance | Sonata Software vs. HDFC Bank Limited | Sonata Software 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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