Correlation Between Credit Suisse and Lord Abbett

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

By analyzing existing cross correlation between Credit Suisse Multialternative and Lord Abbett Health, you can compare the effects of market volatilities on Credit Suisse and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Lord Abbett.

Diversification Opportunities for Credit Suisse and Lord Abbett

-0.02

Correlation Coefficient

Credit Suisse  Lord Abbett

Good diversification

The 3 months correlation between Credit and Lord is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Lord Abbett Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Health 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 Multialternative are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Health has no effect on the direction of Credit Suisse i.e., Credit Suisse and Lord Abbett go up and down completely randomly.

Pair Corralation between Credit Suisse and Lord Abbett

Assuming the 90 days horizon Credit Suisse Multialternative is expected to generate 0.41 times more return on investment than Lord Abbett. However, Credit Suisse Multialternative is 2.43 times less risky than Lord Abbett. It trades about -0.04 of its potential returns per unit of risk. Lord Abbett Health is currently generating about -0.17 per unit of risk. If you would invest  854.00  in Credit Suisse Multialternative on October 12, 2024 and sell it today you would lose (3.00) from holding Credit Suisse Multialternative or give up 0.35% of portfolio value over 90 days.

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

Credit Suisse Multialternative  vs.  Lord Abbett Health

Credit Suisse Multia

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Multialternative are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. 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.

Lord Abbett Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Lord Abbett 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 Lord Abbett

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

The idea behind Credit Suisse Multialternative and Lord Abbett Health 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.