Correlation Between Credit Suisse and Global X

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Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on Credit Suisse and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Global X.

Diversification Opportunities for Credit Suisse and Global X

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Credit and Global is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Credit Suisse i.e., Credit Suisse and Global X go up and down completely randomly.

Pair Corralation between Credit Suisse and Global X

Given the investment horizon of 90 days Credit Suisse is expected to generate 65.51 times less return on investment than Global X. But when comparing it to its historical volatility, Credit Suisse X Links is 112.58 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10,385,500  in Global X Funds on September 5, 2024 and sell it today you would lose (10,382,464) from holding Global X Funds or give up 99.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy94.55%
ValuesDaily Returns

Credit Suisse X Links  vs.  Global X Funds

 Performance 
       Timeline  
Credit Suisse X 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse X Links are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Credit Suisse is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Global X Funds 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Credit Suisse and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Credit Suisse and Global X

The main advantage of trading using opposite Credit Suisse and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind Credit Suisse X Links and Global X Funds 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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