Correlation Between ICICI Bank and Truist Financial
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Truist Financial 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 Truist Financial 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 Truist Financial Corp, you can compare the effects of market volatilities on ICICI Bank and Truist Financial 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 Truist Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Truist Financial.
Diversification Opportunities for ICICI Bank and Truist Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ICICI and Truist is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Truist Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truist Financial Corp 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 Truist Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truist Financial Corp has no effect on the direction of ICICI Bank i.e., ICICI Bank and Truist Financial go up and down completely randomly.
Pair Corralation between ICICI Bank and Truist Financial
Considering the 90-day investment horizon ICICI Bank Limited is expected to generate 0.59 times more return on investment than Truist Financial. However, ICICI Bank Limited is 1.69 times less risky than Truist Financial. It trades about 0.05 of its potential returns per unit of risk. Truist Financial Corp is currently generating about 0.0 per unit of risk. If you would invest 1,877 in ICICI Bank Limited on January 19, 2024 and sell it today you would earn a total of 666.00 from holding ICICI Bank Limited or generate 35.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ICICI Bank Limited vs. Truist Financial Corp
Performance |
Timeline |
ICICI Bank Limited |
Truist Financial Corp |
ICICI Bank and Truist Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICICI Bank and Truist Financial
The main advantage of trading using opposite ICICI Bank and Truist Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Truist Financial 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 Truist Financial will offset losses from the drop in Truist Financial's long position.ICICI Bank vs. US Bancorp | ICICI Bank vs. US Bancorp | ICICI Bank vs. KB Financial Group | ICICI Bank vs. Itau Unibanco Banco |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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