Correlation Between Credit Suisse and Global X
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Global X 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 Global X 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 Global X SP, you can compare the effects of market volatilities on Credit Suisse and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Global X.
Diversification Opportunities for Credit Suisse and Global X
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of Credit Suisse i.e., Credit Suisse and Global X go up and down completely randomly.
Pair Corralation between Credit Suisse and Global X
Given the investment horizon of 90 days Credit Suisse is expected to generate 11.17 times less return on investment than Global X. In addition to that, Credit Suisse is 1.46 times more volatile than Global X SP. It trades about 0.01 of its total potential returns per unit of risk. Global X SP is currently generating about 0.19 per unit of volatility. If you would invest 3,202 in Global X SP on August 26, 2024 and sell it today you would earn a total of 87.00 from holding Global X SP or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse X Links vs. Global X SP
Performance |
| Timeline |
| Credit Suisse X |
| Global X SP |
Credit Suisse and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Global X
The main advantage of trading using opposite Credit Suisse and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Credit Suisse vs. Aquagold International | Credit Suisse vs. Morningstar Unconstrained Allocation | Credit Suisse vs. High Yield Municipal Fund | Credit Suisse vs. Thrivent High Yield |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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