Correlation Between ICICI Securities and Gokul Refoils

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

Diversification Opportunities for ICICI Securities and Gokul Refoils

0.07

Correlation Coefficient

ICICI Securities  Gokul Refoils

Significant diversification

The 3 months correlation between ICICI and Gokul is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and Gokul Refoils and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gokul Refoils 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 Gokul Refoils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gokul Refoils has no effect on the direction of ICICI Securities i.e., ICICI Securities and Gokul Refoils go up and down completely randomly.

Pair Corralation between ICICI Securities and Gokul Refoils

Assuming the 90 days trading horizon ICICI Securities is expected to generate 1.08 times less return on investment than Gokul Refoils. But when comparing it to its historical volatility, ICICI Securities Limited is 1.82 times less risky than Gokul Refoils. It trades about 0.08 of its potential returns per unit of risk. Gokul Refoils and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,715  in Gokul Refoils and on October 22, 2024 and sell it today you would earn a total of  2,127  from holding Gokul Refoils and or generate 57.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

ICICI Securities Limited  vs.  Gokul Refoils and

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.

Gokul Refoils

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICICI Securities and Gokul Refoils

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

The idea behind ICICI Securities Limited and Gokul Refoils and 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.