Correlation Between Tamilnad Mercantile and ICICI Bank
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By analyzing existing cross correlation between Tamilnad Mercantile Bank and ICICI Bank Limited, you can compare the effects of market volatilities on Tamilnad Mercantile 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 Tamilnad Mercantile with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamilnad Mercantile and ICICI Bank.
Diversification Opportunities for Tamilnad Mercantile and ICICI Bank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tamilnad and ICICI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tamilnad Mercantile Bank 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 Tamilnad Mercantile 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 Tamilnad Mercantile Bank 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 Tamilnad Mercantile i.e., Tamilnad Mercantile and ICICI Bank go up and down completely randomly.
Pair Corralation between Tamilnad Mercantile and ICICI Bank
Assuming the 90 days trading horizon Tamilnad Mercantile Bank is expected to under-perform the ICICI Bank. In addition to that, Tamilnad Mercantile is 1.23 times more volatile than ICICI Bank Limited. It trades about -0.15 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 122,525 in ICICI Bank Limited on November 27, 2024 and sell it today you would lose (690.00) from holding ICICI Bank Limited or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamilnad Mercantile Bank vs. ICICI Bank Limited
Performance |
| Timeline |
| Tamilnad Mercantile Bank |
| ICICI Bank Limited |
Tamilnad Mercantile and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamilnad Mercantile and ICICI Bank
The main advantage of trading using opposite Tamilnad Mercantile and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamilnad Mercantile 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.| Tamilnad Mercantile vs. Agro Tech Foods | Tamilnad Mercantile vs. LT Technology Services | Tamilnad Mercantile vs. UltraTech Cement Limited | Tamilnad Mercantile vs. JSW Steel Limited |
| ICICI Bank vs. Alkali Metals Limited | ICICI Bank vs. Shivalik Bimetal Controls | ICICI Bank vs. Fortis Healthcare Limited | ICICI Bank vs. Sarthak Metals Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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