Correlation Between Pimco Commodityrealret and Credit Suisse

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

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

Diversification Opportunities for Pimco Commodityrealret and Credit Suisse

0.99

Correlation Coefficient

Pimco Commodityrealret  Credit Suisse

No risk reduction

The 3 months correlation between Pimco and Credit is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Modityrealreturn Strateg and Credit Suisse Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Modity and Pimco Commodityrealret 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 Pimco Modityrealreturn Strategy 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 Modity has no effect on the direction of Pimco Commodityrealret i.e., Pimco Commodityrealret and Credit Suisse go up and down completely randomly.

Pair Corralation between Pimco Commodityrealret and Credit Suisse

Assuming the 90 days horizon Pimco Modityrealreturn Strategy is expected to generate 0.98 times more return on investment than Credit Suisse. However, Pimco Modityrealreturn Strategy is 1.02 times less risky than Credit Suisse. It trades about 0.2 of its potential returns per unit of risk. Credit Suisse Modity is currently generating about 0.16 per unit of risk. If you would invest  1,283  in Pimco Modityrealreturn Strategy on December 2, 2024 and sell it today you would earn a total of  114.00  from holding Pimco Modityrealreturn Strategy or generate 8.89% return on investment over 90 days.

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

Pimco Modityrealreturn Strateg  vs.  Credit Suisse Modity

Pimco Modityrealreturn

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Modityrealreturn Strategy are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pimco Commodityrealret may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Credit Suisse Modity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Modity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Credit Suisse may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Pimco Commodityrealret and Credit Suisse

The main advantage of trading using opposite Pimco Commodityrealret and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Commodityrealret 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 Pimco Modityrealreturn Strategy and Credit Suisse Modity 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.