Correlation Between CREDIT and Dow Jones
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By analyzing existing cross correlation between CREDIT SUISSE AG and Dow Jones Industrial, you can compare the effects of market volatilities on CREDIT and Dow Jones 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 CREDIT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT and Dow Jones.
Diversification Opportunities for CREDIT and Dow Jones
Very poor diversification
The 3 months correlation between CREDIT and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT SUISSE AG and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and CREDIT 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 CREDIT SUISSE AG are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of CREDIT i.e., CREDIT and Dow Jones go up and down completely randomly.
Pair Corralation between CREDIT and Dow Jones
Assuming the 90 days trading horizon CREDIT SUISSE AG is expected to generate 85.54 times more return on investment than Dow Jones. However, CREDIT is 85.54 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 9,400 in CREDIT SUISSE AG on September 2, 2024 and sell it today you would earn a total of 540.00 from holding CREDIT SUISSE AG or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.45% |
| Values | Daily Returns |
CREDIT SUISSE AG vs. Dow Jones Industrial
Performance |
| Timeline |
CREDIT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CREDIT SUISSE AG
Pair trading matchups for CREDIT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CREDIT and Dow Jones
The main advantage of trading using opposite CREDIT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| CREDIT vs. Apogee Therapeutics, Common | CREDIT vs. Ardelyx | CREDIT vs. Beyond Meat | CREDIT vs. BioNTech SE |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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