Correlation Between Megastar Foods and ICICI Bank
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By analyzing existing cross correlation between Megastar Foods Limited and ICICI Bank Limited, you can compare the effects of market volatilities on Megastar Foods 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 Megastar Foods with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and ICICI Bank.
Diversification Opportunities for Megastar Foods and ICICI Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megastar and ICICI is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited 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 Megastar Foods 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 Megastar Foods Limited 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 Megastar Foods i.e., Megastar Foods and ICICI Bank go up and down completely randomly.
Pair Corralation between Megastar Foods and ICICI Bank
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 4.05 times more return on investment than ICICI Bank. However, Megastar Foods is 4.05 times more volatile than ICICI Bank Limited. It trades about 0.12 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about -0.21 per unit of risk. If you would invest 22,165 in Megastar Foods Limited on October 30, 2024 and sell it today you would earn a total of 2,175 from holding Megastar Foods Limited or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megastar Foods Limited vs. ICICI Bank Limited
Performance |
| Timeline |
| Megastar Foods |
| ICICI Bank Limited |
Megastar Foods and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and ICICI Bank
The main advantage of trading using opposite Megastar Foods and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods 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.| Megastar Foods vs. Gangotri Textiles Limited | Megastar Foods vs. Hemisphere Properties India | Megastar Foods vs. Kingfa Science Technology | Megastar Foods vs. Rico Auto Industries |
| ICICI Bank vs. Yatharth Hospital Trauma | ICICI Bank vs. Teamlease Services Limited | ICICI Bank vs. UTI Asset Management | ICICI Bank vs. Silgo Retail 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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