Correlation Between Pro Blend and Credit Suisse

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

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

Diversification Opportunities for Pro Blend and Credit Suisse

0.06

Correlation Coefficient

Pro Blend  Credit Suisse

Significant diversification

The 3 months correlation between Pro and Credit is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Credit Suisse Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Modity and Pro Blend 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 Pro Blend Moderate Term 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 Modity has no effect on the direction of Pro Blend i.e., Pro Blend and Credit Suisse go up and down completely randomly.

Pair Corralation between Pro Blend and Credit Suisse

Assuming the 90 days horizon Pro Blend Moderate Term is expected to under-perform the Credit Suisse. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pro Blend Moderate Term is 1.13 times less risky than Credit Suisse. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Credit Suisse Modity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,114  in Credit Suisse Modity on September 15, 2024 and sell it today you would earn a total of  65.00  from holding Credit Suisse Modity or generate 3.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pro Blend Moderate Term  vs.  Credit Suisse Modity

Pro Blend Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pro Blend Moderate Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pro Blend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Credit Suisse Modity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Modity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pro Blend and Credit Suisse

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

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.