Correlation Between Blackrock Enhanced and Credit Suisse

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

By analyzing existing cross correlation between Blackrock Enhanced Equity and Credit Suisse Managed, you can compare the effects of market volatilities on Blackrock Enhanced and Credit Suisse 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 Blackrock Enhanced with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Credit Suisse.

Diversification Opportunities for Blackrock Enhanced and Credit Suisse

0.55

Correlation Coefficient

Blackrock Enhanced  Credit Suisse

Very weak diversification

The 3 months correlation between Blackrock and Credit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity and Credit Suisse Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Managed and Blackrock Enhanced 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 Blackrock Enhanced Equity are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Managed has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Credit Suisse go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and Credit Suisse

Considering the 90-day investment horizon Blackrock Enhanced Equity is expected to generate 1.16 times more return on investment than Credit Suisse. However, Blackrock Enhanced is 1.16 times more volatile than Credit Suisse Managed. It trades about 0.13 of its potential returns per unit of risk. Credit Suisse Managed is currently generating about 0.03 per unit of risk. If you would invest  813.00  in Blackrock Enhanced Equity on December 29, 2024 and sell it today you would earn a total of  51.00  from holding Blackrock Enhanced Equity or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Blackrock Enhanced Equity  vs.  Credit Suisse Managed

Blackrock Enhanced Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively weak fundamental indicators, Blackrock Enhanced may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Credit Suisse Managed

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Managed are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Enhanced and Credit Suisse

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

The idea behind Blackrock Enhanced Equity and Credit Suisse Managed 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.

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 the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.