Correlation Between American Balanced and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both American Balanced 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 American Balanced and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Credit Suisse Multialternative, you can compare the effects of market volatilities on American Balanced 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 American Balanced with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Credit Suisse.
Diversification Opportunities for American Balanced and Credit Suisse
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Credit is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund 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 American Balanced 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 American Balanced Fund 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 American Balanced i.e., American Balanced and Credit Suisse go up and down completely randomly.
Pair Corralation between American Balanced and Credit Suisse
Assuming the 90 days horizon American Balanced Fund is expected to generate 1.56 times more return on investment than Credit Suisse. However, American Balanced is 1.56 times more volatile than Credit Suisse Multialternative. It trades about 0.09 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 2,769 in American Balanced Fund on November 9, 2024 and sell it today you would earn a total of 796.00 from holding American Balanced Fund or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Credit Suisse Multialternative
Performance |
| Timeline |
| American Balanced |
| Credit Suisse Multia |
American Balanced and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Credit Suisse
The main advantage of trading using opposite American Balanced and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced 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.| American Balanced vs. Qs Large Cap | American Balanced vs. Americafirst Large Cap | American Balanced vs. Fidelity Large Cap | American Balanced vs. Ab Large Cap |
| Credit Suisse vs. M Large Cap | Credit Suisse vs. Dodge Cox Stock | Credit Suisse vs. Touchstone Large Cap | Credit Suisse vs. Qs Large Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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