Correlation Between Aqr Long and Credit Suisse

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

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

Diversification Opportunities for Aqr Long and Credit Suisse

0.81

Correlation Coefficient

Aqr Long  Credit Suisse

Very poor diversification

The 3 months correlation between Aqr and Credit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating and Aqr Long 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 Aqr Long Short Equity 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 Floating has no effect on the direction of Aqr Long i.e., Aqr Long and Credit Suisse go up and down completely randomly.

Pair Corralation between Aqr Long and Credit Suisse

Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 2.97 times more return on investment than Credit Suisse. However, Aqr Long is 2.97 times more volatile than Credit Suisse Floating. It trades about 0.23 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.15 per unit of risk. If you would invest  1,553  in Aqr Long Short Equity on September 14, 2024 and sell it today you would earn a total of  115.00  from holding Aqr Long Short Equity or generate 7.41% return on investment over 90 days.

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

Aqr Long Short Equity  vs.  Credit Suisse Floating

Aqr Long Short

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Long Short Equity are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Long may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Credit Suisse Floating

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Floating are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Aqr Long and Credit Suisse

The main advantage of trading using opposite Aqr Long and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long 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 Aqr Long Short Equity and Credit Suisse Floating 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.