Correlation Between Credit Suisse and Commodity Return
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Commodity Return 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 Commodity Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Modity and Commodity Return Strategy, you can compare the effects of market volatilities on Credit Suisse and Commodity Return 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 Commodity Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Commodity Return.
Diversification Opportunities for Credit Suisse and Commodity Return
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Credit and Commodity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Modity and Commodity Return Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodity Return Strategy 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 Modity are associated (or correlated) with Commodity Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodity Return Strategy has no effect on the direction of Credit Suisse i.e., Credit Suisse and Commodity Return go up and down completely randomly.
Pair Corralation between Credit Suisse and Commodity Return
Assuming the 90 days horizon Credit Suisse Modity is expected to under-perform the Commodity Return. But the mutual fund apears to be less risky and, when comparing its historical volatility, Credit Suisse Modity is 1.0 times less risky than Commodity Return. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Commodity Return Strategy is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,852 in Commodity Return Strategy on August 29, 2024 and sell it today you would lose (76.00) from holding Commodity Return Strategy or give up 4.1% 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 Modity vs. Commodity Return Strategy
Performance |
| Timeline |
| Credit Suisse Modity |
| Commodity Return Strategy |
Credit Suisse and Commodity Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Commodity Return
The main advantage of trading using opposite Credit Suisse and Commodity Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Commodity Return 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 Commodity Return will offset losses from the drop in Commodity Return's long position.| Credit Suisse vs. Transamerica Large Cap | Credit Suisse vs. American Mutual Fund | Credit Suisse vs. M Large Cap | Credit Suisse vs. Aqr Large Cap |
| Commodity Return vs. Us Government Securities | Commodity Return vs. Dreyfus Government Cash | Commodity Return vs. Fidelity Series Government | Commodity Return vs. Government Securities Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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