Correlation Between IShares Gold and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both IShares Gold and Credit Suisse 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 IShares Gold and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Gold Trust and Credit Suisse X Links, you can compare the effects of market volatilities on IShares Gold and Credit Suisse 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 IShares Gold with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and Credit Suisse.
Diversification Opportunities for IShares Gold and Credit Suisse
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Credit is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X and IShares Gold 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 iShares Gold Trust are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse X has no effect on the direction of IShares Gold i.e., IShares Gold and Credit Suisse go up and down completely randomly.
Pair Corralation between IShares Gold and Credit Suisse
Given the investment horizon of 90 days IShares Gold is expected to generate 1.78 times less return on investment than Credit Suisse. In addition to that, IShares Gold is 1.28 times more volatile than Credit Suisse X Links. It trades about 0.05 of its total potential returns per unit of risk. Credit Suisse X Links is currently generating about 0.1 per unit of volatility. If you would invest 15,192 in Credit Suisse X Links on August 26, 2024 and sell it today you would earn a total of 508.00 from holding Credit Suisse X Links or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Gold Trust vs. Credit Suisse X Links
Performance |
| Timeline |
| iShares Gold Trust |
| Credit Suisse X |
IShares Gold and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and Credit Suisse
The main advantage of trading using opposite IShares Gold and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.| IShares Gold vs. Aquagold International | IShares Gold vs. Morningstar Unconstrained Allocation | IShares Gold vs. High Yield Municipal Fund | IShares Gold vs. Thrivent High Yield |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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