Correlation Between Boeing and Credit Suisse

Can any of the company-specific risk be diversified away by investing in both Boeing 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 Boeing and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Boeing and Credit Suisse, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Credit Suisse.

Diversification Opportunities for Boeing and Credit Suisse

0.61

Correlation Coefficient

Boeing  Credit Suisse

Poor diversification

The 3 months correlation between Boeing and Credit is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Credit Suisse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse and Boeing 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 The Boeing 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 has no effect on the direction of Boeing i.e., Boeing and Credit Suisse go up and down completely randomly.

Pair Corralation between Boeing and Credit Suisse

If you would invest  1,129  in Credit Suisse on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Credit Suisse or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

The Boeing  vs.  Credit Suisse

Boeing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Credit Suisse

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Boeing and Credit Suisse

The main advantage of trading using opposite Boeing and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.

The idea behind The Boeing and Credit Suisse pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.