Correlation Between Max Financial and ICICI Bank
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By analyzing existing cross correlation between Max Financial Services and ICICI Bank Limited, you can compare the effects of market volatilities on Max Financial 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 Max Financial with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and ICICI Bank.
Diversification Opportunities for Max Financial and ICICI Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Max and ICICI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services 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 Max Financial 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 Max Financial Services 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 Max Financial i.e., Max Financial and ICICI Bank go up and down completely randomly.
Pair Corralation between Max Financial and ICICI Bank
Assuming the 90 days trading horizon Max Financial Services is expected to under-perform the ICICI Bank. In addition to that, Max Financial is 1.21 times more volatile than ICICI Bank Limited. It trades about -0.25 of its total potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.03 per unit of volatility. If you would invest 129,440 in ICICI Bank Limited on August 27, 2024 and sell it today you would earn a total of 655.00 from holding ICICI Bank Limited or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Max Financial Services vs. ICICI Bank Limited
Performance |
| Timeline |
| Max Financial Services |
| ICICI Bank Limited |
Max Financial and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Financial and ICICI Bank
The main advantage of trading using opposite Max Financial and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial 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.| Max Financial vs. Gangotri Textiles Limited | Max Financial vs. Hemisphere Properties India | Max Financial vs. Kingfa Science Technology | Max Financial vs. Rico Auto Industries |
| ICICI Bank vs. Imagicaaworld Entertainment Limited | ICICI Bank vs. Sonata Software Limited | ICICI Bank vs. Tata Communications Limited | ICICI Bank vs. Datamatics Global Services |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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