Correlation Between Guggenheim Strategic and Credit Suisse

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

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

Diversification Opportunities for Guggenheim Strategic and Credit Suisse

0.62

Correlation Coefficient

Guggenheim Strategic  Credit Suisse

Poor diversification

The 3 months correlation between Guggenheim and Credit is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Credit Suisse High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse High and Guggenheim Strategic 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 Guggenheim Strategic Opportunities 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 High has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Credit Suisse go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Credit Suisse

Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 1.34 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, Guggenheim Strategic Opportunities is 1.76 times less risky than Credit Suisse. It trades about 0.14 of its potential returns per unit of risk. Credit Suisse High is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Credit Suisse High on September 12, 2024 and sell it today you would earn a total of  12.00  from holding Credit Suisse High or generate 5.71% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Credit Suisse High

Guggenheim Strategic

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Credit Suisse High

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse High are ranked lower than 8 (%) 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.

Pair Trading with Guggenheim Strategic and Credit Suisse

The main advantage of trading using opposite Guggenheim Strategic and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic 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 Guggenheim Strategic Opportunities and Credit Suisse High 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.