Correlation Between Credit Suisse and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Stone Ridge 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 Stone Ridge 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 Stone Ridge Diversified, you can compare the effects of market volatilities on Credit Suisse and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Stone Ridge.
Diversification Opportunities for Credit Suisse and Stone Ridge
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Stone is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Multialternative and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Credit Suisse i.e., Credit Suisse and Stone Ridge go up and down completely randomly.
Pair Corralation between Credit Suisse and Stone Ridge
Assuming the 90 days horizon Credit Suisse is expected to generate 1.6 times less return on investment than Stone Ridge. In addition to that, Credit Suisse is 1.6 times more volatile than Stone Ridge Diversified. It trades about 0.05 of its total potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.12 per unit of volatility. If you would invest 991.00 in Stone Ridge Diversified on November 9, 2024 and sell it today you would earn a total of 72.00 from holding Stone Ridge Diversified or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse Multialternative vs. Stone Ridge Diversified
Performance |
| Timeline |
| Credit Suisse Multia |
| Stone Ridge Diversified |
Credit Suisse and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Stone Ridge
The main advantage of trading using opposite Credit Suisse and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Credit Suisse vs. Great West Goldman Sachs | Credit Suisse vs. Gold And Precious | Credit Suisse vs. World Precious Minerals | Credit Suisse vs. First Eagle Gold |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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