Correlation Between Bank First and Icici Bank

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Can any of the company-specific risk be diversified away by investing in both Bank First 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 Bank First and Icici Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank First National and Icici Bank, you can compare the effects of market volatilities on Bank First 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 Bank First with a short position of Icici Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank First and Icici Bank.

Diversification Opportunities for Bank First and Icici Bank

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bank First and Icici is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and Icici Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icici Bank and Bank First 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 Bank First National 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 has no effect on the direction of Bank First i.e., Bank First and Icici Bank go up and down completely randomly.

Pair Corralation between Bank First and Icici Bank

Considering the 90-day investment horizon Bank First National is expected to generate 0.95 times more return on investment than Icici Bank. However, Bank First National is 1.05 times less risky than Icici Bank. It trades about 0.02 of its potential returns per unit of risk. Icici Bank is currently generating about 0.02 per unit of risk. If you would invest  7,637  in Bank First National on July 8, 2022 and sell it today you would earn a total of  83.00  from holding Bank First National or generate 1.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bank First National  vs.  Icici Bank Ltd

 Performance (%) 
       Timeline  
Bank First National 
Bank First Performance
0 of 100
Over the last 90 days Bank First National has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bank First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bank First Price Channel

Icici Bank 
Icici Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Icici Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Icici Bank may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Icici Price Channel

Bank First and Icici Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank First and Icici Bank

The main advantage of trading using opposite Bank First and Icici Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank First 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.
Bank First vs. Amazon Inc
The idea behind Bank First National and Icici Bank 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.
Icici Bank vs. Amazon Inc
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 CEO Directory module to screen CEOs from public companies around the world.

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