Correlation Between FNB Corp and Icici Bank

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

Diversification Opportunities for FNB Corp and Icici Bank

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FNB Corp and Icici is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp and Icici Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icici Bank and FNB Corp 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 FNB Corp 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 FNB Corp i.e., FNB Corp and Icici Bank go up and down completely randomly.

Pair Corralation between FNB Corp and Icici Bank

Considering the 90-day investment horizon FNB Corp is expected to generate 1.23 times less return on investment than Icici Bank. In addition to that, FNB Corp is 1.05 times more volatile than Icici Bank. It trades about 0.06 of its total potential returns per unit of risk. Icici Bank is currently generating about 0.08 per unit of volatility. If you would invest  1,042  in Icici Bank on June 26, 2022 and sell it today you would earn a total of  1,107  from holding Icici Bank or generate 106.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

FNB Corp  vs.  Icici Bank Ltd

 Performance (%) 
       Timeline  
FNB Corp 
FNB Corp Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in FNB Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, FNB Corp is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

FNB Corp Price Channel

Icici Bank 
Icici Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Icici Bank are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish fundamental drivers, Icici Bank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Icici Price Channel

FNB Corp and Icici Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FNB Corp and Icici Bank

The main advantage of trading using opposite FNB Corp and Icici Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB Corp 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.
FNB Corp vs. Sigma Lithium Corp
The idea behind FNB Corp 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. Sigma Lithium Corp
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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