Correlation Between ICICI Lombard and Electronics Mart
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By analyzing existing cross correlation between ICICI Lombard General and Electronics Mart India, you can compare the effects of market volatilities on ICICI Lombard and Electronics Mart 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 Lombard with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Lombard and Electronics Mart.
Diversification Opportunities for ICICI Lombard and Electronics Mart
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICICI and Electronics is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Lombard General and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India and ICICI Lombard 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 Lombard General are associated (or correlated) with Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of ICICI Lombard i.e., ICICI Lombard and Electronics Mart go up and down completely randomly.
Pair Corralation between ICICI Lombard and Electronics Mart
Assuming the 90 days trading horizon ICICI Lombard General is expected to generate 0.5 times more return on investment than Electronics Mart. However, ICICI Lombard General is 2.02 times less risky than Electronics Mart. It trades about -0.11 of its potential returns per unit of risk. Electronics Mart India is currently generating about -0.09 per unit of risk. If you would invest 215,494 in ICICI Lombard General on September 10, 2024 and sell it today you would lose (20,504) from holding ICICI Lombard General or give up 9.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.41% |
Values | Daily Returns |
ICICI Lombard General vs. Electronics Mart India
Performance |
Timeline |
ICICI Lombard General |
Electronics Mart India |
ICICI Lombard and Electronics Mart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICICI Lombard and Electronics Mart
The main advantage of trading using opposite ICICI Lombard and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Lombard position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.ICICI Lombard vs. Archean Chemical Industries | ICICI Lombard vs. Ankit Metal Power | ICICI Lombard vs. Metalyst Forgings Limited | ICICI Lombard vs. Hisar Metal Industries |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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