Correlation Between Credit Suisse and Mfs International

Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Mfs International 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 Mfs International 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 Mfs International Value, you can compare the effects of market volatilities on Credit Suisse and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Mfs International.

Diversification Opportunities for Credit Suisse and Mfs International

-0.5

Correlation Coefficient

Credit Suisse  Mfs International

Very good diversification

The 3 months correlation between Credit and Mfs is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Credit Suisse i.e., Credit Suisse and Mfs International go up and down completely randomly.

Pair Corralation between Credit Suisse and Mfs International

Assuming the 90 days horizon Credit Suisse Multialternative is expected to generate 0.21 times more return on investment than Mfs International. However, Credit Suisse Multialternative is 4.78 times less risky than Mfs International. It trades about 0.13 of its potential returns per unit of risk. Mfs International Value is currently generating about -0.09 per unit of risk. If you would invest  800.00  in Credit Suisse Multialternative on October 26, 2024 and sell it today you would earn a total of  20.00  from holding Credit Suisse Multialternative or generate 2.5% return on investment over 90 days.

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

Credit Suisse Multialternative  vs.  Mfs International Value

Credit Suisse Multia

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Multialternative are ranked lower than 10 (%) 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.

Mfs International Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Credit Suisse and Mfs International

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

The idea behind Credit Suisse Multialternative and Mfs International Value 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.