Correlation Between ICICI Securities and Univa Foods

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

Diversification Opportunities for ICICI Securities and Univa Foods

0.0

Correlation Coefficient

ICICI Securities  Univa Foods

Pay attention - limited upside

The 3 months correlation between ICICI and Univa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Securities Limited and Univa Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univa Foods 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 Univa Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univa Foods Limited has no effect on the direction of ICICI Securities i.e., ICICI Securities and Univa Foods go up and down completely randomly.

Pair Corralation between ICICI Securities and Univa Foods

Assuming the 90 days trading horizon ICICI Securities Limited is expected to generate 0.81 times more return on investment than Univa Foods. However, ICICI Securities Limited is 1.24 times less risky than Univa Foods. It trades about 0.09 of its potential returns per unit of risk. Univa Foods Limited is currently generating about 0.07 per unit of risk. If you would invest  44,023  in ICICI Securities Limited on October 5, 2024 and sell it today you would earn a total of  42,167  from holding ICICI Securities Limited or generate 95.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	84.98%
Values	Daily Returns

ICICI Securities Limited  vs.  Univa Foods Limited

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Univa Foods Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Univa Foods Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Univa Foods may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ICICI Securities and Univa Foods

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

The idea behind ICICI Securities Limited and Univa Foods 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.