Correlation Between Credit Suisse and Capital World
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Capital World 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 Capital World 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 Capital World Bond, you can compare the effects of market volatilities on Credit Suisse and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Capital World.
Diversification Opportunities for Credit Suisse and Capital World
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Credit and Capital is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Modity and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Credit Suisse i.e., Credit Suisse and Capital World go up and down completely randomly.
Pair Corralation between Credit Suisse and Capital World
Assuming the 90 days horizon Credit Suisse Modity is expected to under-perform the Capital World. In addition to that, Credit Suisse is 1.74 times more volatile than Capital World Bond. It trades about -0.01 of its total potential returns per unit of risk. Capital World Bond is currently generating about 0.01 per unit of volatility. If you would invest 1,581 in Capital World Bond on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Capital World Bond or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Modity vs. Capital World Bond
Performance |
| Timeline |
| Credit Suisse Modity |
| Capital World Bond |
Credit Suisse and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Capital World
The main advantage of trading using opposite Credit Suisse and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Credit Suisse vs. The Gabelli Small | Credit Suisse vs. Blackrock Sm Cap | Credit Suisse vs. Fuller Thaler Behavioral | Credit Suisse vs. T Rowe Price |
| Capital World vs. Limited Term Tax | Capital World vs. T Rowe Price | Capital World vs. The Fixed Income | Capital World vs. Dreyfusstandish Global Fixed |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |