Correlation Between Sp Midcap and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Sp Midcap 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 Sp Midcap and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Credit Suisse Floating, you can compare the effects of market volatilities on Sp Midcap 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 Sp Midcap with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Credit Suisse.
Diversification Opportunities for Sp Midcap and Credit Suisse
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPMIX and Credit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index 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 Sp Midcap 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 Sp Midcap Index 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 Sp Midcap i.e., Sp Midcap and Credit Suisse go up and down completely randomly.
Pair Corralation between Sp Midcap and Credit Suisse
Assuming the 90 days horizon Sp Midcap Index is expected to under-perform the Credit Suisse. In addition to that, Sp Midcap is 13.36 times more volatile than Credit Suisse Floating. It trades about -0.01 of its total potential returns per unit of risk. Credit Suisse Floating is currently generating about -0.04 per unit of volatility. If you would invest 640.00 in Credit Suisse Floating on September 3, 2024 and sell it today you would lose (1.00) from holding Credit Suisse Floating or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Credit Suisse Floating
Performance |
| Timeline |
| Sp Midcap Index |
| Credit Suisse Floating |
Sp Midcap and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Credit Suisse
The main advantage of trading using opposite Sp Midcap and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap 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.| Sp Midcap vs. T Rowe Price | Sp Midcap vs. Qs Moderate Growth | Sp Midcap vs. Hood River New | Sp Midcap vs. T Rowe Price |
| Credit Suisse vs. Oppenheimer Senior Floating | Credit Suisse vs. Oppenheimer Senior Floating | Credit Suisse vs. Floating Rate Fund | Credit Suisse vs. Floating Rate Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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