Correlation Between Industrial Commercial and Credit Suisse

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

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

Diversification Opportunities for Industrial Commercial and Credit Suisse

-0.69

Correlation Coefficient

Industrial Commercial  Credit Suisse

Excellent diversification

The 3 months correlation between Industrial and Credit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Commercial Bank 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 Industrial Commercial 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 Industrial Commercial Bank 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 Industrial Commercial i.e., Industrial Commercial and Credit Suisse go up and down completely randomly.

Pair Corralation between Industrial Commercial and Credit Suisse

If you would invest  1,061  in Industrial Commercial Bank on September 8, 2024 and sell it today you would earn a total of  153.00  from holding Industrial Commercial Bank or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Industrial Commercial Bank  vs.  Credit Suisse Group

Industrial Commercial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Commercial Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Industrial Commercial showed solid returns over the last few months and may actually be approaching a breakup point.

Credit Suisse Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Industrial Commercial and Credit Suisse

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

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.