Correlation Between Ab Select and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Credit Suisse Floating, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Credit Suisse.
Diversification Opportunities for Ab Select and Credit Suisse
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASCLX and Credit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating and Ab Select 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 Ab Select Longshort 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 Floating has no effect on the direction of Ab Select i.e., Ab Select and Credit Suisse go up and down completely randomly.
Pair Corralation between Ab Select and Credit Suisse
Assuming the 90 days horizon Ab Select Longshort is expected to generate 2.75 times more return on investment than Credit Suisse. However, Ab Select is 2.75 times more volatile than Credit Suisse Floating. It trades about 0.13 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.15 per unit of risk. If you would invest 1,240 in Ab Select Longshort on September 1, 2024 and sell it today you would earn a total of 168.00 from holding Ab Select Longshort or generate 13.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Credit Suisse Floating
Performance |
| Timeline |
| Ab Select Longshort |
| Credit Suisse Floating |
Ab Select and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Credit Suisse
The main advantage of trading using opposite Ab Select and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Pace International Emerging | Ab Select vs. Goldman Sachs Emerging | Ab Select vs. Barings Emerging Markets | Ab Select vs. Artisan Emerging Markets |
| Credit Suisse vs. Credit Suisse Floating | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Modity |
Check out your portfolio center.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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