Correlation Between Credit Suisse and Gold Springs

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

Diversification Opportunities for Credit Suisse and Gold Springs

0.45

Correlation Coefficient

Credit Suisse  Gold Springs

Very weak diversification

The 3 months correlation between Credit and Gold is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and Gold Springs Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Springs Resource 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 Gold Springs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Springs Resource has no effect on the direction of Credit Suisse i.e., Credit Suisse and Gold Springs go up and down completely randomly.

Pair Corralation between Credit Suisse and Gold Springs

Given the investment horizon of 90 days Credit Suisse is expected to generate 2.41 times less return on investment than Gold Springs. But when comparing it to its historical volatility, Credit Suisse X Links is 6.33 times less risky than Gold Springs. It trades about 0.24 of its potential returns per unit of risk. Gold Springs Resource is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Gold Springs Resource on May 4, 2025 and sell it today you would earn a total of  1.60  from holding Gold Springs Resource or generate 26.67% return on investment over 90 days.

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

Credit Suisse X Links  vs.  Gold Springs Resource

Credit Suisse X

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse X Links are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Credit Suisse demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Gold Springs Resource

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Springs Resource are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Springs reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Credit Suisse and Gold Springs

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

The idea behind Credit Suisse X Links and Gold Springs Resource 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.