Correlation Between GPT Healthcare and ICICI Lombard

Can any of the company-specific risk be diversified away by investing in both GPT Healthcare and ICICI Lombard 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 GPT Healthcare and ICICI Lombard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GPT Healthcare and ICICI Lombard General, you can compare the effects of market volatilities on GPT Healthcare and ICICI Lombard 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 GPT Healthcare with a short position of ICICI Lombard. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT Healthcare and ICICI Lombard.

Diversification Opportunities for GPT Healthcare and ICICI Lombard

0.72

Correlation Coefficient

GPT Healthcare  ICICI Lombard

Poor diversification

The 3 months correlation between GPT and ICICI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GPT Healthcare and ICICI Lombard General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Lombard General and GPT Healthcare 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 GPT Healthcare are associated (or correlated) with ICICI Lombard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Lombard General has no effect on the direction of GPT Healthcare i.e., GPT Healthcare and ICICI Lombard go up and down completely randomly.

Pair Corralation between GPT Healthcare and ICICI Lombard

Assuming the 90 days trading horizon GPT Healthcare is expected to under-perform the ICICI Lombard. In addition to that, GPT Healthcare is 1.35 times more volatile than ICICI Lombard General. It trades about -0.23 of its total potential returns per unit of risk. ICICI Lombard General is currently generating about -0.07 per unit of volatility. If you would invest  183,410  in ICICI Lombard General on December 1, 2024 and sell it today you would lose (14,315) from holding ICICI Lombard General or give up 7.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

GPT Healthcare  vs.  ICICI Lombard General

GPT Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days GPT Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ICICI Lombard General

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICICI Lombard General has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with GPT Healthcare and ICICI Lombard

The main advantage of trading using opposite GPT Healthcare and ICICI Lombard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT Healthcare position performs unexpectedly, ICICI Lombard 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 Lombard will offset losses from the drop in ICICI Lombard's long position.

The idea behind GPT Healthcare and ICICI Lombard General pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.