Correlation Between ShippingOf India and ICICI Bank

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

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

Diversification Opportunities for ShippingOf India and ICICI Bank

0.0

Correlation Coefficient

ShippingOf India  ICICI Bank

Pay attention - limited upside

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

Pair Corralation between ShippingOf India and ICICI Bank

If you would invest (100.00) in Shipping on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Shipping or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shipping  vs.  ICICI Bank Limited

ShippingOf India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ShippingOf India is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ICICI Bank Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICICI Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ShippingOf India and ICICI Bank

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

The idea behind Shipping and ICICI Bank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.