Correlation Between ICICI Securities and City Union
Can any of the company-specific risk be diversified away by investing in both ICICI Securities and City Union at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ICICI Securities and City Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICICI Securities Limited and City Union Bank, you can compare the effects of market volatilities on ICICI Securities and City Union 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 Securities with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Securities and City Union.
Diversification Opportunities for ICICI Securities and City Union
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ICICI and City is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank and ICICI Securities 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 Securities Limited are associated (or correlated) with City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of ICICI Securities i.e., ICICI Securities and City Union go up and down completely randomly.
Pair Corralation between ICICI Securities and City Union
Assuming the 90 days trading horizon ICICI Securities Limited is expected to under-perform the City Union. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Securities Limited is 1.26 times less risky than City Union. The stock trades about -0.03 of its potential returns per unit of risk. The City Union Bank is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 17,443 in City Union Bank on August 31, 2024 and sell it today you would earn a total of 525.00 from holding City Union Bank or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ICICI Securities Limited vs. City Union Bank
Performance |
| Timeline |
| ICICI Securities |
| City Union Bank |
ICICI Securities and City Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICICI Securities and City Union
The main advantage of trading using opposite ICICI Securities and City Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Securities position performs unexpectedly, City Union 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 City Union will offset losses from the drop in City Union's long position.| ICICI Securities vs. Diligent Media | ICICI Securities vs. EMBASSY OFFICE PARKS | ICICI Securities vs. Cyber Media Research | ICICI Securities vs. HDFC Asset Management |
| City Union vs. ICICI Securities Limited | City Union vs. Nippon Life India | City Union vs. Fortis Healthcare Limited | City Union vs. ICICI Lombard General |
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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