Correlation Between General Insurance and ICICI Securities
Can any of the company-specific risk be diversified away by investing in both General Insurance 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 General Insurance and ICICI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Insurance and ICICI Securities Limited, you can compare the effects of market volatilities on General Insurance 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 General Insurance with a short position of ICICI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and ICICI Securities.
Diversification Opportunities for General Insurance and ICICI Securities
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between General and ICICI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and ICICI Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Securities and General Insurance 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 General Insurance 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 General Insurance i.e., General Insurance and ICICI Securities go up and down completely randomly.
Pair Corralation between General Insurance and ICICI Securities
Assuming the 90 days trading horizon General Insurance is expected to generate 3.53 times more return on investment than ICICI Securities. However, General Insurance is 3.53 times more volatile than ICICI Securities Limited. It trades about 0.16 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 40,665 in General Insurance on October 4, 2024 and sell it today you would earn a total of 4,520 from holding General Insurance or generate 11.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
General Insurance vs. ICICI Securities Limited
Performance |
Timeline |
General Insurance |
ICICI Securities |
General Insurance and ICICI Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Insurance and ICICI Securities
The main advantage of trading using opposite General Insurance and ICICI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance 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.General Insurance vs. KIOCL Limited | General Insurance vs. Spentex Industries Limited | General Insurance vs. Indo Borax Chemicals | General Insurance vs. Kingfa Science Technology |
ICICI Securities vs. Agro Tech Foods | ICICI Securities vs. Sapphire Foods India | ICICI Securities vs. Patanjali Foods Limited | ICICI Securities vs. LT Foods 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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