Correlation Between Credit Suisse and Great-west

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

Diversification Opportunities for Credit Suisse and Great-west

0.61

Correlation Coefficient

Credit Suisse  Great-west

Poor diversification

The 3 months correlation between Credit and Great-west is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Great West Sp Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp 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 Great-west. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Credit Suisse i.e., Credit Suisse and Great-west go up and down completely randomly.

Pair Corralation between Credit Suisse and Great-west

Assuming the 90 days horizon Credit Suisse Multialternative is expected to under-perform the Great-west. In addition to that, Credit Suisse is 1.58 times more volatile than Great West Sp Mid. It trades about -0.21 of its total potential returns per unit of risk. Great West Sp Mid is currently generating about -0.29 per unit of volatility. If you would invest  1,017  in Great West Sp Mid on October 9, 2024 and sell it today you would lose (104.00) from holding Great West Sp Mid or give up 10.23% of portfolio value over 90 days.

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

Credit Suisse Multialternative  vs.  Great West Sp Mid

Credit Suisse Multia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Great West Sp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great West Sp Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Great-west 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 Great-west

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

The idea behind Credit Suisse Multialternative and Great West Sp Mid 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.