Correlation Between Credit Suisse and IHIT

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

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

Diversification Opportunities for Credit Suisse and IHIT

0.11

Correlation Coefficient

Credit Suisse  IHIT

Average diversification

The 3 months correlation between Credit and IHIT is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse High and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT 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 High are associated (or correlated) with IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of Credit Suisse i.e., Credit Suisse and IHIT go up and down completely randomly.

Pair Corralation between Credit Suisse and IHIT

Considering the 90-day investment horizon Credit Suisse High is expected to generate 1.69 times more return on investment than IHIT. However, Credit Suisse is 1.69 times more volatile than IHIT. It trades about 0.08 of its potential returns per unit of risk. IHIT is currently generating about -0.1 per unit of risk. If you would invest  156.00  in Credit Suisse High on October 7, 2024 and sell it today you would earn a total of  62.00  from holding Credit Suisse High or generate 39.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	26.21%
Values	Daily Returns

Credit Suisse High  vs.  IHIT

Credit Suisse High

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse High are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IHIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IHIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, IHIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Credit Suisse and IHIT

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

The idea behind Credit Suisse High and IHIT 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.