Correlation Between Livetech and ICICI Bank

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

By analyzing existing cross correlation between Livetech da Bahia and ICICI Bank Limited, you can compare the effects of market volatilities on Livetech 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 Livetech with a short position of ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livetech and ICICI Bank.

Diversification Opportunities for Livetech and ICICI Bank

0.02

Correlation Coefficient

Livetech  ICICI Bank

Significant diversification

The 3 months correlation between Livetech and ICICI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and ICICI Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Bank Limited and Livetech 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 Livetech da Bahia 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 Limited has no effect on the direction of Livetech i.e., Livetech and ICICI Bank go up and down completely randomly.

Pair Corralation between Livetech and ICICI Bank

Assuming the 90 days trading horizon Livetech da Bahia is expected to generate 2.46 times more return on investment than ICICI Bank. However, Livetech is 2.46 times more volatile than ICICI Bank Limited. It trades about 0.15 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about 0.05 per unit of risk. If you would invest  273.00  in Livetech da Bahia on April 20, 2025 and sell it today you would earn a total of  87.00  from holding Livetech da Bahia or generate 31.87% return on investment over 90 days.

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

Livetech da Bahia  vs.  ICICI Bank Limited

Livetech da Bahia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Livetech da Bahia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Livetech unveiled solid returns over the last few months and may actually be approaching a breakup point.

ICICI Bank Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICICI Bank Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, ICICI Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Livetech and ICICI Bank

The main advantage of trading using opposite Livetech and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livetech 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.

The idea behind Livetech da Bahia and ICICI Bank Limited 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.