Correlation Between Credit Suisse and WisdomTree Japan

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

Diversification Opportunities for Credit Suisse and WisdomTree Japan

-0.51

Correlation Coefficient

Credit Suisse  WisdomTree Japan

Excellent diversification

The 3 months correlation between Credit and WisdomTree is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and WisdomTree Japan Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan Hedged 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 WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan Hedged has no effect on the direction of Credit Suisse i.e., Credit Suisse and WisdomTree Japan go up and down completely randomly.

Pair Corralation between Credit Suisse and WisdomTree Japan

Given the investment horizon of 90 days Credit Suisse is expected to generate 1.95 times less return on investment than WisdomTree Japan. In addition to that, Credit Suisse is 1.0 times more volatile than WisdomTree Japan Hedged. It trades about 0.06 of its total potential returns per unit of risk. WisdomTree Japan Hedged is currently generating about 0.11 per unit of volatility. If you would invest  3,577  in WisdomTree Japan Hedged on May 17, 2025 and sell it today you would earn a total of  111.00  from holding WisdomTree Japan Hedged or generate 3.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.23%
Values	Daily Returns

Credit Suisse X Links  vs.  WisdomTree Japan Hedged

Credit Suisse X

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse X Links are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

WisdomTree Japan Hedged

Risk-Adjusted Performance

Fair

Over the last 90 days WisdomTree Japan Hedged has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, WisdomTree Japan is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Credit Suisse and WisdomTree Japan

The main advantage of trading using opposite Credit Suisse and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, WisdomTree Japan 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 WisdomTree Japan will offset losses from the drop in WisdomTree Japan's long position.

The idea behind Credit Suisse X Links and WisdomTree Japan Hedged 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.