Correlation Between Credit Suisse and Western Asset
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Asset and Western Asset Global, you can compare the effects of market volatilities on Credit Suisse and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Western Asset.
Diversification Opportunities for Credit Suisse and Western Asset
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Credit and Western is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Asset and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 Asset are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Credit Suisse i.e., Credit Suisse and Western Asset go up and down completely randomly.
Pair Corralation between Credit Suisse and Western Asset
Considering the 90-day investment horizon Credit Suisse Asset is expected to generate 1.28 times more return on investment than Western Asset. However, Credit Suisse is 1.28 times more volatile than Western Asset Global. It trades about -0.14 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.19 per unit of risk. If you would invest 290.00 in Credit Suisse Asset on January 11, 2025 and sell it today you would lose (17.40) from holding Credit Suisse Asset or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Asset vs. Western Asset Global
Performance |
| Timeline |
| Credit Suisse Asset |
| Western Asset Global |
Credit Suisse and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Western Asset
The main advantage of trading using opposite Credit Suisse and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Credit Suisse vs. BNY Mellon High | Credit Suisse vs. Mfs Intermediate High | Credit Suisse vs. Eaton Vance Risk | Credit Suisse vs. Nuveen Floating Rate |
| Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. Highland Opportunities And | Western Asset vs. Doubleline Opportunistic Credit | Western Asset vs. Western Asset Emerging |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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