Correlation Between ICICI Bank and Zaggle Prepaid

Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Zaggle Prepaid 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 Zaggle Prepaid 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 Zaggle Prepaid Ocean, you can compare the effects of market volatilities on ICICI Bank and Zaggle Prepaid 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 Zaggle Prepaid. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Zaggle Prepaid.

Diversification Opportunities for ICICI Bank and Zaggle Prepaid

0.61

Correlation Coefficient

ICICI Bank  Zaggle Prepaid

Poor diversification

The 3 months correlation between ICICI and Zaggle is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Zaggle Prepaid Ocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaggle Prepaid Ocean 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 Zaggle Prepaid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaggle Prepaid Ocean has no effect on the direction of ICICI Bank i.e., ICICI Bank and Zaggle Prepaid go up and down completely randomly.

Pair Corralation between ICICI Bank and Zaggle Prepaid

Assuming the 90 days trading horizon ICICI Bank Limited is expected to under-perform the Zaggle Prepaid. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Bank Limited is 2.68 times less risky than Zaggle Prepaid. The stock trades about 0.0 of its potential returns per unit of risk. The Zaggle Prepaid Ocean is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  42,840  in Zaggle Prepaid Ocean on October 15, 2024 and sell it today you would earn a total of  9,140  from holding Zaggle Prepaid Ocean or generate 21.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

ICICI Bank Limited  vs.  Zaggle Prepaid Ocean

ICICI Bank Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICICI Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Zaggle Prepaid Ocean

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zaggle Prepaid Ocean are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Zaggle Prepaid sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICICI Bank and Zaggle Prepaid

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

The idea behind ICICI Bank Limited and Zaggle Prepaid Ocean 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.