Correlation Between ICICI Lombard and Silly Monks

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

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

Diversification Opportunities for ICICI Lombard and Silly Monks

0.05

Correlation Coefficient

ICICI Lombard  Silly Monks

Significant diversification

The 3 months correlation between ICICI and Silly is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Lombard General and Silly Monks Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silly Monks Entertainment and ICICI Lombard 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 Lombard General are associated (or correlated) with Silly Monks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silly Monks Entertainment has no effect on the direction of ICICI Lombard i.e., ICICI Lombard and Silly Monks go up and down completely randomly.

Pair Corralation between ICICI Lombard and Silly Monks

Assuming the 90 days trading horizon ICICI Lombard General is expected to under-perform the Silly Monks. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Lombard General is 3.1 times less risky than Silly Monks. The stock trades about -0.18 of its potential returns per unit of risk. The Silly Monks Entertainment is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,159  in Silly Monks Entertainment on October 6, 2024 and sell it today you would earn a total of  425.00  from holding Silly Monks Entertainment or generate 19.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

ICICI Lombard General  vs.  Silly Monks Entertainment

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.

Silly Monks Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silly Monks Entertainment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Silly Monks displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICICI Lombard and Silly Monks

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

The idea behind ICICI Lombard General and Silly Monks Entertainment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.