Correlation Between ICICI Securities and Quess Corp

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

Diversification Opportunities for ICICI Securities and Quess Corp

0.2

Correlation Coefficient

ICICI Securities  Quess Corp

Modest diversification

The 3 months correlation between ICICI and Quess is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and Quess Corp Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quess Corp Limited 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 Quess Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quess Corp Limited has no effect on the direction of ICICI Securities i.e., ICICI Securities and Quess Corp go up and down completely randomly.

Pair Corralation between ICICI Securities and Quess Corp

Assuming the 90 days trading horizon ICICI Securities Limited is expected to generate 0.5 times more return on investment than Quess Corp. However, ICICI Securities Limited is 2.0 times less risky than Quess Corp. It trades about 0.06 of its potential returns per unit of risk. Quess Corp Limited is currently generating about -0.04 per unit of risk. If you would invest  83,350  in ICICI Securities Limited on September 2, 2024 and sell it today you would earn a total of  3,915  from holding ICICI Securities Limited or generate 4.7% return on investment over 90 days.

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

ICICI Securities Limited  vs.  Quess Corp Limited

ICICI Securities

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Securities Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Quess Corp Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quess Corp Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Quess Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ICICI Securities and Quess Corp

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

The idea behind ICICI Securities Limited and Quess Corp Limited 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.