Correlation Between Barings Active and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Credit Suisse Strategic, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Credit Suisse.
Diversification Opportunities for Barings Active and Credit Suisse
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Credit is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Credit Suisse Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Strategic and Barings Active 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 Barings Active Short 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 Strategic has no effect on the direction of Barings Active i.e., Barings Active and Credit Suisse go up and down completely randomly.
Pair Corralation between Barings Active and Credit Suisse
Assuming the 90 days horizon Barings Active is expected to generate 1.63 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, Barings Active Short is 1.34 times less risky than Credit Suisse. It trades about 0.17 of its potential returns per unit of risk. Credit Suisse Strategic is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Credit Suisse Strategic on August 26, 2024 and sell it today you would earn a total of 182.00 from holding Credit Suisse Strategic or generate 23.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Credit Suisse Strategic
Performance |
| Timeline |
| Barings Active Short |
| Credit Suisse Strategic |
Barings Active and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Credit Suisse
The main advantage of trading using opposite Barings Active and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Icon Information Technology | Barings Active vs. Mfs Technology Fund | Barings Active vs. Allianzgi Technology Fund | Barings Active vs. Firsthand Technology Opportunities |
| Credit Suisse vs. Barings Active Short | Credit Suisse vs. Mirova Global Green | Credit Suisse vs. Fundvantage Trust | Credit Suisse vs. Chartwell Short Duration |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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