Correlation Between PTC India and ICICI Securities
Can any of the company-specific risk be diversified away by investing in both PTC India and ICICI Securities 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 PTC India and ICICI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTC India Financial and ICICI Securities Limited, you can compare the effects of market volatilities on PTC India and ICICI Securities 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 PTC India with a short position of ICICI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTC India and ICICI Securities.
Diversification Opportunities for PTC India and ICICI Securities
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PTC and ICICI is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PTC India Financial and ICICI Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Securities and PTC India 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 PTC India Financial are associated (or correlated) with ICICI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Securities has no effect on the direction of PTC India i.e., PTC India and ICICI Securities go up and down completely randomly.
Pair Corralation between PTC India and ICICI Securities
Assuming the 90 days trading horizon PTC India Financial is expected to generate 2.09 times more return on investment than ICICI Securities. However, PTC India is 2.09 times more volatile than ICICI Securities Limited. It trades about 0.07 of its potential returns per unit of risk. ICICI Securities Limited is currently generating about 0.08 per unit of risk. If you would invest 1,635 in PTC India Financial on September 2, 2024 and sell it today you would earn a total of 2,735 from holding PTC India Financial or generate 167.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTC India Financial vs. ICICI Securities Limited
Performance |
| Timeline |
| PTC India Financial |
| ICICI Securities |
PTC India and ICICI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTC India and ICICI Securities
The main advantage of trading using opposite PTC India and ICICI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTC India position performs unexpectedly, ICICI Securities 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 Securities will offset losses from the drop in ICICI Securities' long position.| PTC India vs. State Bank of | PTC India vs. Life Insurance | PTC India vs. HDFC Bank Limited | PTC India vs. ICICI Bank Limited |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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