Correlation Between NYSE Composite and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Credit Suisse Floating, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Credit Suisse.
Diversification Opportunities for NYSE Composite and Credit Suisse
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Credit is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Credit Suisse go up and down completely randomly.
Pair Corralation between NYSE Composite and Credit Suisse
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.7 times more return on investment than Credit Suisse. However, NYSE Composite is 3.7 times more volatile than Credit Suisse Floating. It trades about 0.17 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.19 per unit of risk. If you would invest 1,491,920 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 520,425 from holding NYSE Composite or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Credit Suisse Floating
Performance |
| Timeline |
NYSE Composite and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Credit Suisse Floating
Pair trading matchups for Credit Suisse
Pair Trading with NYSE Composite and Credit Suisse
The main advantage of trading using opposite NYSE Composite and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Credit Suisse vs. Credit Suisse Floating | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Managed |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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