Correlation Between Indian Metals and ICICI Bank
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By analyzing existing cross correlation between Indian Metals Ferro and ICICI Bank Limited, you can compare the effects of market volatilities on Indian Metals and ICICI Bank 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 Indian Metals with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and ICICI Bank.
Diversification Opportunities for Indian Metals and ICICI Bank
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indian and ICICI is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Indian Metals Ferro and ICICI Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Bank Limited and Indian Metals 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 Indian Metals Ferro are associated (or correlated) with ICICI Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Bank Limited has no effect on the direction of Indian Metals i.e., Indian Metals and ICICI Bank go up and down completely randomly.
Pair Corralation between Indian Metals and ICICI Bank
Assuming the 90 days trading horizon Indian Metals Ferro is expected to generate 2.61 times more return on investment than ICICI Bank. However, Indian Metals is 2.61 times more volatile than ICICI Bank Limited. It trades about 0.07 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.07 per unit of risk. If you would invest 28,883 in Indian Metals Ferro on November 6, 2024 and sell it today you would earn a total of 40,037 from holding Indian Metals Ferro or generate 138.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Metals Ferro vs. ICICI Bank Limited
Performance |
| Timeline |
| Indian Metals Ferro |
| ICICI Bank Limited |
Indian Metals and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Metals and ICICI Bank
The main advantage of trading using opposite Indian Metals and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Metals position performs unexpectedly, ICICI Bank 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 ICICI Bank will offset losses from the drop in ICICI Bank's long position.| Indian Metals vs. SINCLAIRS HOTELS ORD | Indian Metals vs. Viceroy Hotels Limited | Indian Metals vs. Lemon Tree Hotels | Indian Metals vs. Hindustan Copper Limited |
| ICICI Bank vs. Spencers Retail Limited | ICICI Bank vs. Zota Health Care | ICICI Bank vs. V2 Retail Limited | ICICI Bank vs. Apollo Hospitals Enterprise |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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