Correlation Between Hemisphere Properties and ICICI Lombard

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

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

Diversification Opportunities for Hemisphere Properties and ICICI Lombard

0.5

Correlation Coefficient

Hemisphere Properties  ICICI Lombard

Very weak diversification

The 3 months correlation between Hemisphere and ICICI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Properties India 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 Hemisphere Properties 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 Hemisphere Properties India 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 Hemisphere Properties i.e., Hemisphere Properties and ICICI Lombard go up and down completely randomly.

Pair Corralation between Hemisphere Properties and ICICI Lombard

Assuming the 90 days trading horizon Hemisphere Properties India is expected to under-perform the ICICI Lombard. In addition to that, Hemisphere Properties is 1.67 times more volatile than ICICI Lombard General. It trades about -0.06 of its total potential returns per unit of risk. ICICI Lombard General is currently generating about -0.09 per unit of volatility. If you would invest  193,370  in ICICI Lombard General on October 7, 2024 and sell it today you would lose (9,550) from holding ICICI Lombard General or give up 4.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hemisphere Properties India  vs.  ICICI Lombard General

Hemisphere Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hemisphere Properties India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hemisphere Properties is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ICICI Lombard General

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Hemisphere Properties and ICICI Lombard

The main advantage of trading using opposite Hemisphere Properties and ICICI Lombard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Properties 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 Hemisphere Properties India 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.