Correlation Between Icici Bank and Bancfirst Corp

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

Diversification Opportunities for Icici Bank and Bancfirst Corp

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Icici and Bancfirst is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Icici Bank Ltd and Bancfirst Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancfirst 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 are associated (or correlated) with Bancfirst Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancfirst Corp has no effect on the direction of Icici Bank i.e., Icici Bank and Bancfirst Corp go up and down completely randomly.

Pair Corralation between Icici Bank and Bancfirst Corp

Considering the 90-day investment horizon Icici Bank is expected to generate 1.08 times less return on investment than Bancfirst Corp. But when comparing it to its historical volatility, Icici Bank is 1.01 times less risky than Bancfirst Corp. It trades about 0.07 of its potential returns per unit of risk. Bancfirst Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,438  in Bancfirst Corp on July 3, 2022 and sell it today you would earn a total of  4,509  from holding Bancfirst Corp or generate 101.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Icici Bank Ltd  vs.  Bancfirst Corp

 Performance (%) 
       Timeline  
Icici Bank 
Icici Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Icici Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Icici Bank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Icici Price Channel

Bancfirst Corp 
Bancfirst Performance
0 of 100
Over the last 90 days Bancfirst Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bancfirst Price Channel

Icici Bank and Bancfirst Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Icici Bank and Bancfirst Corp

The main advantage of trading using opposite Icici Bank and Bancfirst Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icici Bank position performs unexpectedly, Bancfirst Corp 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 Bancfirst Corp will offset losses from the drop in Bancfirst Corp's long position.
Icici Bank vs. Amazon Inc
The idea behind Icici Bank and Bancfirst Corp 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.
Bancfirst Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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