Correlation Between Credit Suisse and Global Strategist

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

Diversification Opportunities for Credit Suisse and Global Strategist

0.81

Correlation Coefficient

Credit Suisse  Global Strategist

Very poor diversification

The 3 months correlation between Credit and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Global Strategist Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Strategist 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 Global Strategist. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Strategist has no effect on the direction of Credit Suisse i.e., Credit Suisse and Global Strategist go up and down completely randomly.

Pair Corralation between Credit Suisse and Global Strategist

Assuming the 90 days horizon Credit Suisse Multialternative is expected to generate 0.63 times more return on investment than Global Strategist. However, Credit Suisse Multialternative is 1.58 times less risky than Global Strategist. It trades about 0.14 of its potential returns per unit of risk. Global Strategist Portfolio is currently generating about 0.06 per unit of risk. If you would invest  812.00  in Credit Suisse Multialternative on December 21, 2024 and sell it today you would earn a total of  24.00  from holding Credit Suisse Multialternative or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Credit Suisse Multialternative  vs.  Global Strategist Portfolio

Credit Suisse Multia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Multialternative are ranked lower than 11 (%) 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.

Global Strategist

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Strategist Portfolio are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Strategist 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 Global Strategist

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

The idea behind Credit Suisse Multialternative and Global Strategist Portfolio 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.