Correlation Between Western Asset and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Credit Suisse High, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Credit Suisse.
Diversification Opportunities for Western Asset and Credit Suisse
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Credit is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Credit Suisse High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse High and Western Asset 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 Western Asset High 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 High has no effect on the direction of Western Asset i.e., Western Asset and Credit Suisse go up and down completely randomly.
Pair Corralation between Western Asset and Credit Suisse
Considering the 90-day investment horizon Western Asset is expected to generate 1.47 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, Western Asset High is 1.6 times less risky than Credit Suisse. It trades about 0.24 of its potential returns per unit of risk. Credit Suisse High is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Credit Suisse High on May 7, 2025 and sell it today you would earn a total of 15.00 from holding Credit Suisse High or generate 7.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset High vs. Credit Suisse High
Performance |
Timeline |
Western Asset High |
Credit Suisse High |
Western Asset and Credit Suisse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Credit Suisse
The main advantage of trading using opposite Western Asset and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Morningstar Unconstrained Allocation |
Credit Suisse vs. Credit Suisse Asset | Credit Suisse vs. BNY Mellon High | Credit Suisse vs. Mfs Intermediate High | Credit Suisse vs. Eaton Vance Risk |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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