Correlation Between JPMorgan Nasdaq and Credit Suisse

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

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

Diversification Opportunities for JPMorgan Nasdaq and Credit Suisse

0.4

Correlation Coefficient

JPMorgan Nasdaq  Credit Suisse

Very weak diversification

The 3 months correlation between JPMorgan and Credit is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and Credit Suisse Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Asset and JPMorgan Nasdaq 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 JPMorgan Nasdaq Equity 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 Asset has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and Credit Suisse go up and down completely randomly.

Pair Corralation between JPMorgan Nasdaq and Credit Suisse

Given the investment horizon of 90 days JPMorgan Nasdaq Equity is expected to generate 0.7 times more return on investment than Credit Suisse. However, JPMorgan Nasdaq Equity is 1.43 times less risky than Credit Suisse. It trades about 0.14 of its potential returns per unit of risk. Credit Suisse Asset is currently generating about 0.05 per unit of risk. If you would invest  3,466  in JPMorgan Nasdaq Equity on November 19, 2024 and sell it today you would earn a total of  2,361  from holding JPMorgan Nasdaq Equity or generate 68.12% return on investment over 90 days.

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

JPMorgan Nasdaq Equity  vs.  Credit Suisse Asset

JPMorgan Nasdaq Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Nasdaq Equity are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, JPMorgan Nasdaq may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Credit Suisse Asset

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Asset are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Credit Suisse is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JPMorgan Nasdaq and Credit Suisse

The main advantage of trading using opposite JPMorgan Nasdaq and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Nasdaq 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 JPMorgan Nasdaq Equity and Credit Suisse Asset 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 Commodity Directory module to find actively traded commodities issued by global exchanges.