Correlation Between Credit Suisse and Commodity Return

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

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

Diversification Opportunities for Credit Suisse and Commodity Return

0.07

Correlation Coefficient

Credit Suisse  Commodity Return

Significant diversification

The 3 months correlation between Credit and Commodity is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Managed and Commodity Return Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodity Return Strategy and Credit Suisse 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 Credit Suisse Managed are associated (or correlated) with Commodity Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodity Return Strategy has no effect on the direction of Credit Suisse i.e., Credit Suisse and Commodity Return go up and down completely randomly.

Pair Corralation between Credit Suisse and Commodity Return

Assuming the 90 days horizon Credit Suisse Managed is expected to under-perform the Commodity Return. But the mutual fund apears to be less risky and, when comparing its historical volatility, Credit Suisse Managed is 1.16 times less risky than Commodity Return. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Commodity Return Strategy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,734  in Commodity Return Strategy on September 13, 2024 and sell it today you would earn a total of  78.00  from holding Commodity Return Strategy or generate 4.5% return on investment over 90 days.

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

Credit Suisse Managed  vs.  Commodity Return Strategy

Credit Suisse Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Commodity Return Strategy

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Commodity Return Strategy are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Commodity Return is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Credit Suisse and Commodity Return

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

The idea behind Credit Suisse Managed and Commodity Return Strategy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.