Correlation Between BlackRock and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both BlackRock 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 BlackRock and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and Credit Suisse Group, you can compare the effects of market volatilities on BlackRock 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 BlackRock with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Credit Suisse.
Diversification Opportunities for BlackRock and Credit Suisse
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlackRock and Credit is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Credit Suisse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Group and BlackRock 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 BlackRock 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 Group has no effect on the direction of BlackRock i.e., BlackRock and Credit Suisse go up and down completely randomly.
Pair Corralation between BlackRock and Credit Suisse
If you would invest 86,182 in BlackRock on September 6, 2024 and sell it today you would earn a total of 17,318 from holding BlackRock or generate 20.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 1.59% |
Values | Daily Returns |
BlackRock vs. Credit Suisse Group
Performance |
Timeline |
BlackRock |
Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BlackRock and Credit Suisse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BlackRock and Credit Suisse
The main advantage of trading using opposite BlackRock and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock 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 BlackRock and Credit Suisse Group 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.Credit Suisse vs. Banco Bilbao Vizcaya | Credit Suisse vs. Agricultural Bank | Credit Suisse vs. Mitsubishi UFJ Financial | Credit Suisse vs. Barclays PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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