Correlation Between Samsung Electronics and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and ICICI Bank Limited, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ICICI Bank.
Diversification Opportunities for Samsung Electronics and ICICI Bank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and ICICI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co 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 Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and ICICI Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and ICICI Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.02 times more return on investment than ICICI Bank. However, Samsung Electronics is 1.02 times more volatile than ICICI Bank Limited. It trades about 0.02 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about -0.31 per unit of risk. If you would invest 73,600 in Samsung Electronics Co on October 20, 2024 and sell it today you would earn a total of 200.00 from holding Samsung Electronics Co or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Samsung Electronics Co vs. ICICI Bank Limited
Performance |
| Timeline |
| Samsung Electronics |
| ICICI Bank Limited |
Samsung Electronics and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and ICICI Bank
The main advantage of trading using opposite Samsung Electronics and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Alfa Financial Software | Samsung Electronics vs. China Datang | Samsung Electronics vs. MACOM Technology Solutions | Samsung Electronics vs. Linedata Services SA |
| ICICI Bank vs. China Merchants Bank | ICICI Bank vs. HDFC Bank Limited | ICICI Bank vs. PT Bank Central | ICICI Bank vs. DBS Group Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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