Correlation Between Credit Suisse and Smallcap Fund
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Smallcap Fund 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 Smallcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Multialternative and Smallcap Fund Fka, you can compare the effects of market volatilities on Credit Suisse and Smallcap Fund 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 Smallcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Smallcap Fund.
Diversification Opportunities for Credit Suisse and Smallcap Fund
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Credit and Smallcap is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Smallcap Fund Fka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Fund Fka 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 Multialternative are associated (or correlated) with Smallcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Fund Fka has no effect on the direction of Credit Suisse i.e., Credit Suisse and Smallcap Fund go up and down completely randomly.
Pair Corralation between Credit Suisse and Smallcap Fund
Assuming the 90 days horizon Credit Suisse is expected to generate 1.69 times less return on investment than Smallcap Fund. But when comparing it to its historical volatility, Credit Suisse Multialternative is 2.81 times less risky than Smallcap Fund. It trades about 0.24 of its potential returns per unit of risk. Smallcap Fund Fka is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,573 in Smallcap Fund Fka on November 4, 2024 and sell it today you would earn a total of 75.00 from holding Smallcap Fund Fka or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Multialternative vs. Smallcap Fund Fka
Performance |
| Timeline |
| Credit Suisse Multia |
| Smallcap Fund Fka |
Credit Suisse and Smallcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Smallcap Fund
The main advantage of trading using opposite Credit Suisse and Smallcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Smallcap Fund 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 Smallcap Fund will offset losses from the drop in Smallcap Fund's long position.| Credit Suisse vs. Blackrock Health Sciences | Credit Suisse vs. Tekla Healthcare Investors | Credit Suisse vs. Baron Health Care | Credit Suisse vs. Eaton Vance Worldwide |
| Smallcap Fund vs. Virtus Convertible | Smallcap Fund vs. Advent Claymore Convertible | Smallcap Fund vs. Absolute Convertible Arbitrage | Smallcap Fund vs. Rationalpier 88 Convertible |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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