Correlation Between Sprott Physical and Credit Suisse

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

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

Diversification Opportunities for Sprott Physical and Credit Suisse

0.16

Correlation Coefficient

Sprott Physical  Credit Suisse

Average diversification

The 3 months correlation between Sprott and Credit is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Silver and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X and Sprott Physical 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 Sprott Physical Silver 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 X has no effect on the direction of Sprott Physical i.e., Sprott Physical and Credit Suisse go up and down completely randomly.

Pair Corralation between Sprott Physical and Credit Suisse

Given the investment horizon of 90 days Sprott Physical Silver is expected to generate 1.35 times more return on investment than Credit Suisse. However, Sprott Physical is 1.35 times more volatile than Credit Suisse X Links. It trades about 0.06 of its potential returns per unit of risk. Credit Suisse X Links is currently generating about 0.05 per unit of risk. If you would invest  977.00  in Sprott Physical Silver on September 5, 2024 and sell it today you would earn a total of  65.00  from holding Sprott Physical Silver or generate 6.65% return on investment over 90 days.

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

Sprott Physical Silver  vs.  Credit Suisse X Links

Sprott Physical Silver

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Credit Suisse X

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse X Links are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sprott Physical and Credit Suisse

The main advantage of trading using opposite Sprott Physical and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical 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 Sprott Physical Silver and Credit Suisse X Links 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.