Correlation Between SPDR Dow and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both SPDR Dow 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 SPDR Dow and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and Credit Suisse X Links, you can compare the effects of market volatilities on SPDR Dow 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 SPDR Dow with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and Credit Suisse.
Diversification Opportunities for SPDR Dow and Credit Suisse
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Credit is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X and SPDR Dow 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 SPDR Dow Jones 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 X has no effect on the direction of SPDR Dow i.e., SPDR Dow and Credit Suisse go up and down completely randomly.
Pair Corralation between SPDR Dow and Credit Suisse
Considering the 90-day investment horizon SPDR Dow Jones is expected to generate 0.81 times more return on investment than Credit Suisse. However, SPDR Dow Jones is 1.23 times less risky than Credit Suisse. It trades about 0.05 of its potential returns per unit of risk. Credit Suisse X Links is currently generating about 0.04 per unit of risk. If you would invest 8,376 in SPDR Dow Jones on August 28, 2024 and sell it today you would earn a total of 2,409 from holding SPDR Dow Jones or generate 28.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. Credit Suisse X Links
Performance |
| Timeline |
| SPDR Dow Jones |
| Credit Suisse X |
SPDR Dow and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and Credit Suisse
The main advantage of trading using opposite SPDR Dow and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow 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.| SPDR Dow vs. iShares Cohen Steers | SPDR Dow vs. iShares Real Estate | SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. iShares Utilities ETF |
| Credit Suisse vs. Aquagold International | Credit Suisse vs. Morningstar Unconstrained Allocation | Credit Suisse vs. High Yield Municipal Fund | Credit Suisse vs. Thrivent High Yield |
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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