Correlation Between ICICI Bank and Tarapur Transformers
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By analyzing existing cross correlation between ICICI Bank Limited and Tarapur Transformers Limited, you can compare the effects of market volatilities on ICICI Bank and Tarapur Transformers 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 Tarapur Transformers. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Tarapur Transformers.
Diversification Opportunities for ICICI Bank and Tarapur Transformers
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICICI and Tarapur is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Tarapur Transformers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarapur Transformers 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 Tarapur Transformers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarapur Transformers has no effect on the direction of ICICI Bank i.e., ICICI Bank and Tarapur Transformers go up and down completely randomly.
Pair Corralation between ICICI Bank and Tarapur Transformers
Assuming the 90 days trading horizon ICICI Bank Limited is expected to under-perform the Tarapur Transformers. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 2.29 times less risky than Tarapur Transformers. The stock trades about -0.26 of its potential returns per unit of risk. The Tarapur Transformers Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,468 in Tarapur Transformers Limited on October 12, 2024 and sell it today you would earn a total of 130.00 from holding Tarapur Transformers Limited or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICICI Bank Limited vs. Tarapur Transformers Limited
Performance |
| Timeline |
| ICICI Bank Limited |
| Tarapur Transformers |
ICICI Bank and Tarapur Transformers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Bank and Tarapur Transformers
The main advantage of trading using opposite ICICI Bank and Tarapur Transformers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Tarapur Transformers 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 Tarapur Transformers will offset losses from the drop in Tarapur Transformers' long position.| ICICI Bank vs. California Software | ICICI Bank vs. Sonata Software Limited | ICICI Bank vs. Le Travenues Technology | ICICI Bank vs. Sasken Technologies Limited |
| Tarapur Transformers vs. Reliance Industries Limited | Tarapur Transformers vs. Oil Natural Gas | Tarapur Transformers vs. ICICI Bank Limited | Tarapur Transformers 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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