Correlation Between ICICI Lombard and UFO Moviez

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

Diversification Opportunities for ICICI Lombard and UFO Moviez

0.95

Correlation Coefficient

ICICI Lombard  UFO Moviez

Almost no diversification

The 3 months correlation between ICICI and UFO is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Lombard General and UFO Moviez India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFO Moviez India 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 UFO Moviez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFO Moviez India has no effect on the direction of ICICI Lombard i.e., ICICI Lombard and UFO Moviez go up and down completely randomly.

Pair Corralation between ICICI Lombard and UFO Moviez

Assuming the 90 days trading horizon ICICI Lombard General is expected to generate 0.52 times more return on investment than UFO Moviez. However, ICICI Lombard General is 1.92 times less risky than UFO Moviez. It trades about 0.08 of its potential returns per unit of risk. UFO Moviez India is currently generating about 0.0 per unit of risk. If you would invest  130,021  in ICICI Lombard General on October 5, 2024 and sell it today you would earn a total of  53,799  from holding ICICI Lombard General or generate 41.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.67%
Values	Daily Returns

ICICI Lombard General  vs.  UFO Moviez India

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 unfluctuating 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.

UFO Moviez India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UFO Moviez India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ICICI Lombard and UFO Moviez

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

The idea behind ICICI Lombard General and UFO Moviez India 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.