Correlation Between ICICI Securities and Jindal Poly

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

Diversification Opportunities for ICICI Securities and Jindal Poly

0.73

Correlation Coefficient

ICICI Securities  Jindal Poly

Poor diversification

The 3 months correlation between ICICI and Jindal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and Jindal Poly Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Poly Investment 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 Jindal Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Poly Investment has no effect on the direction of ICICI Securities i.e., ICICI Securities and Jindal Poly go up and down completely randomly.

Pair Corralation between ICICI Securities and Jindal Poly

Assuming the 90 days trading horizon ICICI Securities Limited is expected to generate 0.44 times more return on investment than Jindal Poly. However, ICICI Securities Limited is 2.27 times less risky than Jindal Poly. It trades about -0.11 of its potential returns per unit of risk. Jindal Poly Investment is currently generating about -0.25 per unit of risk. If you would invest  87,265  in ICICI Securities Limited on November 29, 2024 and sell it today you would lose (6,020) from holding ICICI Securities Limited or give up 6.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ICICI Securities Limited  vs.  Jindal Poly Investment

ICICI Securities

Risk-Adjusted Performance

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 latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Jindal Poly Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jindal Poly Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ICICI Securities and Jindal Poly

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

The idea behind ICICI Securities Limited and Jindal Poly Investment 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..