Correlation Between ICICI Securities and Entero Healthcare

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

By analyzing existing cross correlation between ICICI Securities Limited and Entero Healthcare Solutions, you can compare the effects of market volatilities on ICICI Securities and Entero Healthcare 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 Securities with a short position of Entero Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Securities and Entero Healthcare.

Diversification Opportunities for ICICI Securities and Entero Healthcare

0.24

Correlation Coefficient

ICICI Securities  Entero Healthcare

Modest diversification

The 3 months correlation between ICICI and Entero is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and Entero Healthcare Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entero Healthcare and ICICI Securities 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 Securities Limited are associated (or correlated) with Entero Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entero Healthcare has no effect on the direction of ICICI Securities i.e., ICICI Securities and Entero Healthcare go up and down completely randomly.

Pair Corralation between ICICI Securities and Entero Healthcare

Assuming the 90 days trading horizon ICICI Securities Limited is expected to under-perform the Entero Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, ICICI Securities Limited is 1.49 times less risky than Entero Healthcare. The stock trades about -0.03 of its potential returns per unit of risk. The Entero Healthcare Solutions is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  130,440  in Entero Healthcare Solutions on October 5, 2024 and sell it today you would earn a total of  11,495  from holding Entero Healthcare Solutions or generate 8.81% return on investment over 90 days.

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

ICICI Securities Limited  vs.  Entero Healthcare Solutions

ICICI Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICICI Securities Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ICICI Securities is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Entero Healthcare

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Entero Healthcare Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Entero Healthcare may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ICICI Securities and Entero Healthcare

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

The idea behind ICICI Securities Limited and Entero Healthcare Solutions 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.