Correlation Between ICICI Bank and Summit Securities

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Summit 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 ICICI Bank and Summit Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICICI Bank Limited and Summit Securities Limited, you can compare the effects of market volatilities on ICICI Bank and Summit 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 ICICI Bank with a short position of Summit Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Summit Securities.

Diversification Opportunities for ICICI Bank and Summit Securities

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ICICI and Summit is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Summit Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Securities and ICICI Bank 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 ICICI Bank Limited are associated (or correlated) with Summit Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Securities has no effect on the direction of ICICI Bank i.e., ICICI Bank and Summit Securities go up and down completely randomly.

Pair Corralation between ICICI Bank and Summit Securities

Assuming the 90 days trading horizon ICICI Bank Limited is expected to generate 0.35 times more return on investment than Summit Securities. However, ICICI Bank Limited is 2.83 times less risky than Summit Securities. It trades about -0.26 of its potential returns per unit of risk. Summit Securities Limited is currently generating about -0.26 per unit of risk. If you would invest  132,350  in ICICI Bank Limited on October 9, 2024 and sell it today you would lose (5,940) from holding ICICI Bank Limited or give up 4.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ICICI Bank Limited  vs.  Summit Securities Limited

 Performance 
       Timeline  
ICICI Bank Limited 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Bank Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ICICI Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Summit Securities 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Summit Securities Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Summit Securities unveiled solid returns over the last few months and may actually be approaching a breakup point.

ICICI Bank and Summit Securities Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ICICI Bank and Summit Securities

The main advantage of trading using opposite ICICI Bank and Summit Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Summit 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 Summit Securities will offset losses from the drop in Summit Securities' long position.
The idea behind ICICI Bank Limited and Summit Securities Limited 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
CEOs Directory
Screen CEOs from public companies around the world
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Volatility Analysis
Get historical volatility and risk analysis based on latest market data