Correlation Between Commodity Return and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Commodity Return 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 Commodity Return and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodity Return Strategy and Credit Suisse Strategic, you can compare the effects of market volatilities on Commodity Return 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 Commodity Return with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodity Return and Credit Suisse.
Diversification Opportunities for Commodity Return and Credit Suisse
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commodity and Credit is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Commodity Return Strategy 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 Commodity Return 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 Commodity Return 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 Strategic has no effect on the direction of Commodity Return i.e., Commodity Return and Credit Suisse go up and down completely randomly.
Pair Corralation between Commodity Return and Credit Suisse
Assuming the 90 days horizon Commodity Return Strategy is expected to under-perform the Credit Suisse. In addition to that, Commodity Return is 4.81 times more volatile than Credit Suisse Strategic. It trades about -0.03 of its total potential returns per unit of risk. Credit Suisse Strategic is currently generating about 0.2 per unit of volatility. If you would invest 918.00 in Credit Suisse Strategic on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Credit Suisse Strategic or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodity Return Strategy vs. Credit Suisse Strategic
Performance |
| Timeline |
| Commodity Return Strategy |
| Credit Suisse Strategic |
Commodity Return and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodity Return and Credit Suisse
The main advantage of trading using opposite Commodity Return and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodity Return 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.| Commodity Return vs. Us Government Securities | Commodity Return vs. Dreyfus Government Cash | Commodity Return vs. Fidelity Series Government | Commodity Return vs. Government Securities Fund |
| Credit Suisse vs. Ab Municipal Bond | Credit Suisse vs. Guidepath Managed Futures | Credit Suisse vs. Ab Bond Inflation | Credit Suisse vs. Goldman Sachs Inflation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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