Correlation Between Western Asset and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Credit Suisse High, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Credit Suisse.
Diversification Opportunities for Western Asset and Credit Suisse
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Credit is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Credit Suisse High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse High and Western Asset 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 Western Asset Diversified 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 High has no effect on the direction of Western Asset i.e., Western Asset and Credit Suisse go up and down completely randomly.
Pair Corralation between Western Asset and Credit Suisse
Considering the 90-day investment horizon Western Asset is expected to generate 1.06 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, Western Asset Diversified is 1.32 times less risky than Credit Suisse. It trades about 0.1 of its potential returns per unit of risk. Credit Suisse High is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 156.00 in Credit Suisse High on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Credit Suisse High or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Credit Suisse High
Performance |
| Timeline |
| Western Asset Diversified |
| Credit Suisse High |
Western Asset and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Credit Suisse
The main advantage of trading using opposite Western Asset and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth | Western Asset vs. Cohen Steers Tax Advantaged |
| Credit Suisse vs. MFS Investment Grade | Credit Suisse vs. Invesco High Income | Credit Suisse vs. Eaton Vance National | Credit Suisse vs. Nuveen California Select |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |