Correlation Between Credit Suisse and AdvisorShares STAR
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and AdvisorShares STAR 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 AdvisorShares STAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse X Links and AdvisorShares STAR Global, you can compare the effects of market volatilities on Credit Suisse and AdvisorShares STAR 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 AdvisorShares STAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and AdvisorShares STAR.
Diversification Opportunities for Credit Suisse and AdvisorShares STAR
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Credit and AdvisorShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and AdvisorShares STAR Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares STAR Global 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 X Links are associated (or correlated) with AdvisorShares STAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares STAR Global has no effect on the direction of Credit Suisse i.e., Credit Suisse and AdvisorShares STAR go up and down completely randomly.
Pair Corralation between Credit Suisse and AdvisorShares STAR
Given the investment horizon of 90 days Credit Suisse X Links is expected to generate 0.95 times more return on investment than AdvisorShares STAR. However, Credit Suisse X Links is 1.05 times less risky than AdvisorShares STAR. It trades about 0.09 of its potential returns per unit of risk. AdvisorShares STAR Global is currently generating about 0.09 per unit of risk. If you would invest 11,770 in Credit Suisse X Links on August 30, 2024 and sell it today you would earn a total of 3,563 from holding Credit Suisse X Links or generate 30.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse X Links vs. AdvisorShares STAR Global
Performance |
| Timeline |
| Credit Suisse X |
| AdvisorShares STAR Global |
Credit Suisse and AdvisorShares STAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and AdvisorShares STAR
The main advantage of trading using opposite Credit Suisse and AdvisorShares STAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, AdvisorShares STAR 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 AdvisorShares STAR will offset losses from the drop in AdvisorShares STAR's long position.| Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Global X Alternative | Credit Suisse vs. Global X Russell |
| AdvisorShares STAR vs. AdvisorShares Dorsey Wright | AdvisorShares STAR vs. Vident Core Bond | AdvisorShares STAR vs. WBI BullBear Quality | AdvisorShares STAR vs. WBI BullBear Value |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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