Correlation Between REC and ICICI Securities
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By analyzing existing cross correlation between REC Limited and ICICI Securities Limited, you can compare the effects of market volatilities on REC 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 REC with a short position of ICICI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC and ICICI Securities.
Diversification Opportunities for REC and ICICI Securities
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REC and ICICI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding REC Limited and ICICI Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Securities and REC 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 REC Limited 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 REC i.e., REC and ICICI Securities go up and down completely randomly.
Pair Corralation between REC and ICICI Securities
Assuming the 90 days trading horizon REC Limited is expected to generate 1.92 times more return on investment than ICICI Securities. However, REC is 1.92 times more volatile than ICICI Securities Limited. It trades about 0.06 of its potential returns per unit of risk. ICICI Securities Limited is currently generating about 0.06 per unit of risk. If you would invest 38,166 in REC Limited on September 2, 2024 and sell it today you would earn a total of 15,094 from holding REC Limited or generate 39.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REC Limited vs. ICICI Securities Limited
Performance |
| Timeline |
| REC Limited |
| ICICI Securities |
REC and ICICI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC and ICICI Securities
The main advantage of trading using opposite REC and ICICI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC 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.| REC vs. Tata Investment | REC vs. Kalyani Investment | REC vs. Popular Vehicles and | REC vs. Tamilnadu Telecommunication Limited |
| ICICI Securities vs. Dev Information Technology | ICICI Securities vs. Hathway Cable Datacom | ICICI Securities vs. Zodiac Clothing | ICICI Securities vs. FCS Software Solutions |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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