Correlation Between Cornerstone Strategic and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic 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 Cornerstone Strategic and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Value and Credit Suisse High, you can compare the effects of market volatilities on Cornerstone Strategic 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 Cornerstone Strategic with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Credit Suisse.
Diversification Opportunities for Cornerstone Strategic and Credit Suisse
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cornerstone and Credit is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Credit Suisse High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse High and Cornerstone Strategic 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 Cornerstone Strategic Value 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 High has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Credit Suisse go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Credit Suisse
Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 1.1 times more return on investment than Credit Suisse. However, Cornerstone Strategic is 1.1 times more volatile than Credit Suisse High. It trades about 0.66 of its potential returns per unit of risk. Credit Suisse High is currently generating about 0.23 per unit of risk. If you would invest 799.00 in Cornerstone Strategic Value on September 3, 2024 and sell it today you would earn a total of 98.00 from holding Cornerstone Strategic Value or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornerstone Strategic Value vs. Credit Suisse High
Performance |
| Timeline |
| Cornerstone Strategic |
| Credit Suisse High |
Cornerstone Strategic and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Strategic and Credit Suisse
The main advantage of trading using opposite Cornerstone Strategic and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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.The idea behind Cornerstone Strategic Value and Credit Suisse High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Credit Suisse vs. Brookfield Real Assets | Credit Suisse vs. Guggenheim Strategic Opportunities | Credit Suisse vs. Cornerstone Strategic Return | Credit Suisse vs. Cornerstone Strategic 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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