Correlation Between United States and Credit Suisse

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

By analyzing existing cross correlation between United States 12 and Credit Suisse X Links, you can compare the effects of market volatilities on United States 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 United States with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Credit Suisse.

Diversification Opportunities for United States and Credit Suisse

-0.43

Correlation Coefficient

United States  Credit Suisse

Very good diversification

The 3 months correlation between United and Credit is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding United States 12 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 United States 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 United States 12 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 United States i.e., United States and Credit Suisse go up and down completely randomly.

Pair Corralation between United States and Credit Suisse

Considering the 90-day investment horizon United States 12 is expected to generate 2.44 times more return on investment than Credit Suisse. However, United States is 2.44 times more volatile than Credit Suisse X Links. It trades about 0.21 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  774.00  in United States 12 on December 20, 2024 and sell it today you would earn a total of  279.00  from holding United States 12 or generate 36.05% return on investment over 90 days.

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

United States 12  vs.  Credit Suisse X Links

United States 12

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United States 12 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, United States disclosed solid returns over the last few months and may actually be approaching a breakup point.

Credit Suisse X

Risk-Adjusted Performance

Very Weak

Over the last 90 days Credit Suisse X Links has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with United States and Credit Suisse

The main advantage of trading using opposite United States and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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 United States 12 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.