Correlation Between Credit Suisse and Us Government
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Us Government 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 Credit Suisse and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Floating and Us Government Securities, you can compare the effects of market volatilities on Credit Suisse and Us Government 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 Credit Suisse with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Us Government.
Diversification Opportunities for Credit Suisse and Us Government
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CREDIT and UGSDX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Floating and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Credit Suisse 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 Credit Suisse Floating are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Credit Suisse i.e., Credit Suisse and Us Government go up and down completely randomly.
Pair Corralation between Credit Suisse and Us Government
Assuming the 90 days horizon Credit Suisse Floating is expected to generate 1.57 times more return on investment than Us Government. However, Credit Suisse is 1.57 times more volatile than Us Government Securities. It trades about 0.16 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.15 per unit of risk. If you would invest 616.00 in Credit Suisse Floating on October 26, 2024 and sell it today you would earn a total of 22.00 from holding Credit Suisse Floating or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Floating vs. Us Government Securities
Performance |
| Timeline |
| Credit Suisse Floating |
| Us Government Securities |
Credit Suisse and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Us Government
The main advantage of trading using opposite Credit Suisse and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Credit Suisse vs. Transamerica Mlp Energy | Credit Suisse vs. Salient Mlp Energy | Credit Suisse vs. World Energy Fund | Credit Suisse vs. Fidelity Advisor Energy |
| Us Government vs. Small Midcap Dividend Income | Us Government vs. Credit Suisse Floating | Us Government vs. Boyd Watterson Limited | Us Government vs. Shelton E Value |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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