Correlation Between Credit Suisse and ETRACS 2xMonthly
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and ETRACS 2xMonthly 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 Credit Suisse and ETRACS 2xMonthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse X Links and ETRACS 2xMonthly Pay, you can compare the effects of market volatilities on Credit Suisse and ETRACS 2xMonthly 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 Suisse with a short position of ETRACS 2xMonthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and ETRACS 2xMonthly.
Diversification Opportunities for Credit Suisse and ETRACS 2xMonthly
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Credit and ETRACS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and ETRACS 2xMonthly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS 2xMonthly Pay and Credit Suisse 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 X Links are associated (or correlated) with ETRACS 2xMonthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS 2xMonthly Pay has no effect on the direction of Credit Suisse i.e., Credit Suisse and ETRACS 2xMonthly go up and down completely randomly.
Pair Corralation between Credit Suisse and ETRACS 2xMonthly
Given the investment horizon of 90 days Credit Suisse X Links is expected to generate 0.85 times more return on investment than ETRACS 2xMonthly. However, Credit Suisse X Links is 1.18 times less risky than ETRACS 2xMonthly. It trades about 0.04 of its potential returns per unit of risk. ETRACS 2xMonthly Pay is currently generating about 0.02 per unit of risk. If you would invest 5,194 in Credit Suisse X Links on August 28, 2024 and sell it today you would earn a total of 1,188 from holding Credit Suisse X Links or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Suisse X Links vs. ETRACS 2xMonthly Pay
Performance |
| Timeline |
| Credit Suisse X |
| ETRACS 2xMonthly Pay |
Credit Suisse and ETRACS 2xMonthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and ETRACS 2xMonthly
The main advantage of trading using opposite Credit Suisse and ETRACS 2xMonthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, ETRACS 2xMonthly 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 ETRACS 2xMonthly will offset losses from the drop in ETRACS 2xMonthly's long position.| Credit Suisse vs. Aquagold International | Credit Suisse vs. Morningstar Unconstrained Allocation | Credit Suisse vs. High Yield Municipal Fund | Credit Suisse vs. Thrivent High Yield |
| ETRACS 2xMonthly vs. ETRACS 2xMonthly Pay | ETRACS 2xMonthly vs. ETRACS Monthly Pay | ETRACS 2xMonthly vs. ETRACS Monthly Pay | ETRACS 2xMonthly vs. ETRACS Monthly Pay |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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