Correlation Between Morningstar Municipal and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Morningstar Municipal 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 Morningstar Municipal and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morningstar Municipal Bond and Credit Suisse Floating, you can compare the effects of market volatilities on Morningstar Municipal 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 Morningstar Municipal with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morningstar Municipal and Credit Suisse.
Diversification Opportunities for Morningstar Municipal and Credit Suisse
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Morningstar and Credit is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Municipal Bond and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating and Morningstar Municipal 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 Morningstar Municipal Bond 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 Floating has no effect on the direction of Morningstar Municipal i.e., Morningstar Municipal and Credit Suisse go up and down completely randomly.
Pair Corralation between Morningstar Municipal and Credit Suisse
Assuming the 90 days horizon Morningstar Municipal Bond is expected to generate 1.15 times more return on investment than Credit Suisse. However, Morningstar Municipal is 1.15 times more volatile than Credit Suisse Floating. It trades about 0.21 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.1 per unit of risk. If you would invest 997.00 in Morningstar Municipal Bond on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Morningstar Municipal Bond or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morningstar Municipal Bond vs. Credit Suisse Floating
Performance |
| Timeline |
| Morningstar Municipal |
| Credit Suisse Floating |
Morningstar Municipal and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morningstar Municipal and Credit Suisse
The main advantage of trading using opposite Morningstar Municipal and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morningstar Municipal 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.| Morningstar Municipal vs. Dws Government Money | Morningstar Municipal vs. Virtus Seix Government | Morningstar Municipal vs. Ab Government Exchange | Morningstar Municipal vs. Franklin Adjustable Government |
| Credit Suisse vs. Shelton Emerging Markets | Credit Suisse vs. Sp Midcap Index | Credit Suisse vs. Siit Emerging Markets | Credit Suisse vs. Doubleline Emerging Markets |
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 CEOs Directory module to screen CEOs from public companies around the world.
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