Correlation Between ICICI Lombard and Oracle Financial

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

By analyzing existing cross correlation between ICICI Lombard General and Oracle Financial Services, you can compare the effects of market volatilities on ICICI Lombard and Oracle 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 Lombard with a short position of Oracle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Lombard and Oracle Financial.

Diversification Opportunities for ICICI Lombard and Oracle Financial

0.67

Correlation Coefficient

ICICI Lombard  Oracle Financial

Poor diversification

The 3 months correlation between ICICI and Oracle is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Lombard General and Oracle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle Financial Services and ICICI Lombard 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 Lombard General are associated (or correlated) with Oracle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle Financial Services has no effect on the direction of ICICI Lombard i.e., ICICI Lombard and Oracle Financial go up and down completely randomly.

Pair Corralation between ICICI Lombard and Oracle Financial

Assuming the 90 days trading horizon ICICI Lombard is expected to generate 2.47 times less return on investment than Oracle Financial. But when comparing it to its historical volatility, ICICI Lombard General is 1.37 times less risky than Oracle Financial. It trades about 0.05 of its potential returns per unit of risk. Oracle Financial Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  789,412  in Oracle Financial Services on April 20, 2025 and sell it today you would earn a total of  89,638  from holding Oracle Financial Services or generate 11.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ICICI Lombard General  vs.  Oracle Financial Services

ICICI Lombard General

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Lombard General are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ICICI Lombard is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Oracle Financial Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle Financial Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Oracle Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ICICI Lombard and Oracle Financial

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

The idea behind ICICI Lombard General and Oracle Financial Services 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.