Correlation Between M Large and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both M Large 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 M Large and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and Credit Suisse Modity, you can compare the effects of market volatilities on M Large 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 M Large with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Credit Suisse.
Diversification Opportunities for M Large and Credit Suisse
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MTCGX and Credit is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Credit Suisse Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Modity and M Large 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 M Large Cap 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 Modity has no effect on the direction of M Large i.e., M Large and Credit Suisse go up and down completely randomly.
Pair Corralation between M Large and Credit Suisse
Assuming the 90 days horizon M Large Cap is expected to generate 1.74 times more return on investment than Credit Suisse. However, M Large is 1.74 times more volatile than Credit Suisse Modity. It trades about 0.06 of its potential returns per unit of risk. Credit Suisse Modity is currently generating about 0.03 per unit of risk. If you would invest 3,280 in M Large Cap on September 1, 2024 and sell it today you would earn a total of 411.00 from holding M Large Cap or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
M Large Cap vs. Credit Suisse Modity
Performance |
| Timeline |
| M Large Cap |
| Credit Suisse Modity |
M Large and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Credit Suisse
The main advantage of trading using opposite M Large and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.| M Large vs. Government Securities Fund | M Large vs. Inverse Government Long | M Large vs. Dws Government Money | M Large vs. Dreyfus Government Cash |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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