Correlation Between ICICI Bank and Sberbank

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

By analyzing existing cross correlation between ICICI Bank Limited and Sberbank Of Russia, you can compare the effects of market volatilities on ICICI Bank and Sberbank 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 Sberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Sberbank.

Diversification Opportunities for ICICI Bank and Sberbank

0.0

Correlation Coefficient

ICICI Bank  Sberbank

Pay attention - limited upside

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

Pair Corralation between ICICI Bank and Sberbank

If you would invest  1,911  in ICICI Bank Limited on January 24, 2024 and sell it today you would earn a total of  700.00  from holding ICICI Bank Limited or generate 36.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

ICICI Bank Limited  vs.  Sberbank Of Russia

ICICI Bank Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Bank Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental drivers, ICICI Bank may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Sberbank Of Russia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sberbank Of Russia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Sberbank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ICICI Bank and Sberbank

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

The idea behind ICICI Bank Limited and Sberbank Of Russia 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.