Correlation Between ICICI Bank and UFLEX
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By analyzing existing cross correlation between ICICI Bank Limited and UFLEX Limited, you can compare the effects of market volatilities on ICICI Bank and UFLEX 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 Bank with a short position of UFLEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and UFLEX.
Diversification Opportunities for ICICI Bank and UFLEX
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICICI and UFLEX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and UFLEX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFLEX Limited and ICICI Bank 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 Bank Limited are associated (or correlated) with UFLEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFLEX Limited has no effect on the direction of ICICI Bank i.e., ICICI Bank and UFLEX go up and down completely randomly.
Pair Corralation between ICICI Bank and UFLEX
Assuming the 90 days trading horizon ICICI Bank is expected to generate 1.61 times less return on investment than UFLEX. But when comparing it to its historical volatility, ICICI Bank Limited is 2.81 times less risky than UFLEX. It trades about 0.12 of its potential returns per unit of risk. UFLEX Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 45,760 in UFLEX Limited on September 8, 2024 and sell it today you would earn a total of 12,260 from holding UFLEX Limited or generate 26.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
ICICI Bank Limited vs. UFLEX Limited
Performance |
Timeline |
ICICI Bank Limited |
UFLEX Limited |
ICICI Bank and UFLEX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICICI Bank and UFLEX
The main advantage of trading using opposite ICICI Bank and UFLEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, UFLEX 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 UFLEX will offset losses from the drop in UFLEX's long position.ICICI Bank vs. Ankit Metal Power | ICICI Bank vs. Kilitch Drugs Limited | ICICI Bank vs. Indian Metals Ferro | ICICI Bank vs. Som Distilleries Breweries |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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