Correlation Between Credit Suisse and Madison Covered
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Madison Covered 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 Madison Covered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Strategic and Madison Covered Call, you can compare the effects of market volatilities on Credit Suisse and Madison Covered 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 Madison Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Madison Covered.
Diversification Opportunities for Credit Suisse and Madison Covered
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Credit and Madison is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Strategic and Madison Covered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Covered Call 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 Strategic are associated (or correlated) with Madison Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Covered Call has no effect on the direction of Credit Suisse i.e., Credit Suisse and Madison Covered go up and down completely randomly.
Pair Corralation between Credit Suisse and Madison Covered
Assuming the 90 days horizon Credit Suisse is expected to generate 2.14 times less return on investment than Madison Covered. But when comparing it to its historical volatility, Credit Suisse Strategic is 5.09 times less risky than Madison Covered. It trades about 0.11 of its potential returns per unit of risk. Madison Covered Call is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 664.00 in Madison Covered Call on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Madison Covered Call or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Credit Suisse Strategic vs. Madison Covered Call
Performance |
| Timeline |
| Credit Suisse Strategic |
| Madison Covered Call |
Credit Suisse and Madison Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Madison Covered
The main advantage of trading using opposite Credit Suisse and Madison Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Madison Covered 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 Madison Covered will offset losses from the drop in Madison Covered's long position.| Credit Suisse vs. Credit Suisse Floating | Credit Suisse vs. Credit Suisse Floating | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Modity |
| Madison Covered vs. Columbia Global Technology | Madison Covered vs. Vanguard Information Technology | Madison Covered vs. Putnam Global Technology | Madison Covered vs. Columbia Global Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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