Correlation Between TechnipFMC Plc and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both TechnipFMC Plc 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 TechnipFMC Plc and ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC plc and ICICI Bank Limited, you can compare the effects of market volatilities on TechnipFMC Plc 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 TechnipFMC Plc with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC Plc and ICICI Bank.
Diversification Opportunities for TechnipFMC Plc and ICICI Bank
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TechnipFMC and ICICI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC plc 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 TechnipFMC Plc 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 TechnipFMC plc 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 TechnipFMC Plc i.e., TechnipFMC Plc and ICICI Bank go up and down completely randomly.
Pair Corralation between TechnipFMC Plc and ICICI Bank
Assuming the 90 days trading horizon TechnipFMC plc is expected to generate 0.68 times more return on investment than ICICI Bank. However, TechnipFMC plc is 1.47 times less risky than ICICI Bank. It trades about -0.15 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about -0.3 per unit of risk. If you would invest 19,164 in TechnipFMC plc on November 7, 2024 and sell it today you would lose (784.00) from holding TechnipFMC plc or give up 4.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC plc vs. ICICI Bank Limited
Performance |
| Timeline |
| TechnipFMC plc |
| ICICI Bank Limited |
TechnipFMC Plc and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC Plc and ICICI Bank
The main advantage of trading using opposite TechnipFMC Plc and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC Plc 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.| TechnipFMC Plc vs. Ameriprise Financial | TechnipFMC Plc vs. Sony Group | TechnipFMC Plc vs. Energisa SA | TechnipFMC Plc vs. BTG Pactual Logstica |
| ICICI Bank vs. Taiwan Semiconductor Manufacturing | ICICI Bank vs. Apple Inc | ICICI Bank vs. Alibaba Group Holding | ICICI Bank vs. Microsoft |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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