Correlation Between Metropolitan West and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Metropolitan West 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 Metropolitan West and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West Porate and Credit Suisse Multialternative, you can compare the effects of market volatilities on Metropolitan West 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 Metropolitan West with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Credit Suisse.
Diversification Opportunities for Metropolitan West and Credit Suisse
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metropolitan and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West Porate and Credit Suisse Multialternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Multia and Metropolitan West 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 Metropolitan West Porate 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 Multia has no effect on the direction of Metropolitan West i.e., Metropolitan West and Credit Suisse go up and down completely randomly.
Pair Corralation between Metropolitan West and Credit Suisse
Assuming the 90 days horizon Metropolitan West Porate is expected to generate 1.2 times more return on investment than Credit Suisse. However, Metropolitan West is 1.2 times more volatile than Credit Suisse Multialternative. It trades about 0.04 of its potential returns per unit of risk. Credit Suisse Multialternative is currently generating about 0.02 per unit of risk. If you would invest 842.00 in Metropolitan West Porate on November 5, 2024 and sell it today you would earn a total of 81.00 from holding Metropolitan West Porate or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West Porate vs. Credit Suisse Multialternative
Performance |
| Timeline |
| Metropolitan West Porate |
| Credit Suisse Multia |
Metropolitan West and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Credit Suisse
The main advantage of trading using opposite Metropolitan West and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West 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.| Metropolitan West vs. Aqr Equity Market | Metropolitan West vs. Locorr Market Trend | Metropolitan West vs. Old Westbury Short Term | Metropolitan West vs. Eagle Mlp Strategy |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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