Correlation Between Income Fund and Credit Suisse

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

By analyzing existing cross correlation between Income Fund Institutional and Credit Suisse Floating, you can compare the effects of market volatilities on Income Fund and Credit Suisse 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 Income Fund with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Credit Suisse.

Diversification Opportunities for Income Fund and Credit Suisse

-0.79

Correlation Coefficient

Income Fund  Credit Suisse

Pay attention - limited upside

The 3 months correlation between INCOME and Credit is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Institutional and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating and Income Fund 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 Income Fund Institutional are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Floating has no effect on the direction of Income Fund i.e., Income Fund and Credit Suisse go up and down completely randomly.

Pair Corralation between Income Fund and Credit Suisse

Assuming the 90 days horizon Income Fund Institutional is expected to under-perform the Credit Suisse. In addition to that, Income Fund is 1.85 times more volatile than Credit Suisse Floating. It trades about -0.04 of its total potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.15 per unit of volatility. If you would invest  624.00  in Credit Suisse Floating on September 2, 2024 and sell it today you would earn a total of  10.00  from holding Credit Suisse Floating or generate 1.6% return on investment over 90 days.

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

Income Fund Institutional  vs.  Credit Suisse Floating

Income Fund Institutional

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Income Fund Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Income Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Credit Suisse Floating

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Floating 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.

Pair Trading with Income Fund and Credit Suisse

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

The idea behind Income Fund Institutional and Credit Suisse Floating 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 Transaction History module to view history of all your transactions and understand their impact on performance.