Correlation Between MAHLE Metal and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and ICICI Bank 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 MAHLE Metal and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and ICICI Bank Limited, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and ICICI Bank.
Diversification Opportunities for MAHLE Metal and ICICI Bank
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAHLE and ICICI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve 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 MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and ICICI Bank go up and down completely randomly.
Pair Corralation between MAHLE Metal and ICICI Bank
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 2.81 times more return on investment than ICICI Bank. However, MAHLE Metal is 2.81 times more volatile than ICICI Bank Limited. It trades about 0.03 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.08 per unit of risk. If you would invest 2,274 in MAHLE Metal Leve on October 26, 2024 and sell it today you would earn a total of 483.00 from holding MAHLE Metal Leve or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
MAHLE Metal Leve vs. ICICI Bank Limited
Performance |
| Timeline |
| MAHLE Metal Leve |
| ICICI Bank Limited |
MAHLE Metal and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and ICICI Bank
The main advantage of trading using opposite MAHLE Metal and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| ICICI Bank vs. Alaska Air Group, | ICICI Bank vs. Tres Tentos Agroindustrial | ICICI Bank vs. Metalrgica Riosulense SA | ICICI Bank vs. The Trade Desk |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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