Correlation Between Small Company and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Small Company 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 Small Company and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Fund and Credit Suisse Floating, you can compare the effects of market volatilities on Small Company 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 Small Company with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Credit Suisse.
Diversification Opportunities for Small Company and Credit Suisse
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Credit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Fund 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 Small Company 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 Small Pany Fund 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 Small Company i.e., Small Company and Credit Suisse go up and down completely randomly.
Pair Corralation between Small Company and Credit Suisse
Assuming the 90 days horizon Small Pany Fund is expected to generate 7.43 times more return on investment than Credit Suisse. However, Small Company is 7.43 times more volatile than Credit Suisse Floating. It trades about 0.15 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.34 per unit of risk. If you would invest 2,653 in Small Pany Fund on April 25, 2025 and sell it today you would earn a total of 294.00 from holding Small Pany Fund or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Small Pany Fund vs. Credit Suisse Floating
Performance |
| Timeline |
| Small Pany Fund |
| Credit Suisse Floating |
Small Company and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Company and Credit Suisse
The main advantage of trading using opposite Small Company and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company 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.| Small Company vs. International Fund International | Small Company vs. Parnassus Mid Cap | Small Company vs. Balanced Fund Institutional | Small Company vs. Short Intermediate Bond Fund |
| Credit Suisse vs. Blackrock Government Bond | Credit Suisse vs. Dreyfus Government Cash | Credit Suisse vs. Morgan Stanley Institutional | Credit Suisse vs. Legg Mason Partners |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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