Correlation Between Credit Suisse and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Mid Cap, you can compare the effects of market volatilities on Credit Suisse and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Prudential Jennison.
Diversification Opportunities for Credit Suisse and Prudential Jennison
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Prudential is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Prudential Jennison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Mid 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison Mid has no effect on the direction of Credit Suisse i.e., Credit Suisse and Prudential Jennison go up and down completely randomly.
Pair Corralation between Credit Suisse and Prudential Jennison
Assuming the 90 days horizon Credit Suisse Multialternative is expected to under-perform the Prudential Jennison. In addition to that, Credit Suisse is 1.31 times more volatile than Prudential Jennison Mid Cap. It trades about -0.21 of its total potential returns per unit of risk. Prudential Jennison Mid Cap is currently generating about -0.24 per unit of volatility. If you would invest 1,393 in Prudential Jennison Mid Cap on October 9, 2024 and sell it today you would lose (140.00) from holding Prudential Jennison Mid Cap or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Multialternative vs. Prudential Jennison Mid Cap
Performance |
| Timeline |
| Credit Suisse Multia |
| Prudential Jennison Mid |
Credit Suisse and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Prudential Jennison
The main advantage of trading using opposite Credit Suisse and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Credit Suisse vs. Wisdomtree Siegel Global | Credit Suisse vs. Ab Global Bond | Credit Suisse vs. Us Global Investors | Credit Suisse vs. Scharf Global Opportunity |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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