Correlation Between LO Funds and Julius Baer

Can any of the company-specific risk be diversified away by investing in both LO Funds and Julius Baer 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 LO Funds and Julius Baer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LO Funds Swiss and Julius Baer Edelweiss, you can compare the effects of market volatilities on LO Funds and Julius Baer 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 LO Funds with a short position of Julius Baer. Check out your portfolio center. Please also check ongoing floating volatility patterns of LO Funds and Julius Baer.

Diversification Opportunities for LO Funds and Julius Baer

0.95

Correlation Coefficient

LO Funds  Julius Baer

Almost no diversification

The 3 months correlation between 0P00001R8Q and Julius is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding LO Funds Swiss and Julius Baer Edelweiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Baer Edelweiss and LO Funds 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 LO Funds Swiss are associated (or correlated) with Julius Baer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Julius Baer Edelweiss has no effect on the direction of LO Funds i.e., LO Funds and Julius Baer go up and down completely randomly.

Pair Corralation between LO Funds and Julius Baer

Assuming the 90 days trading horizon LO Funds Swiss is expected to generate 1.18 times more return on investment than Julius Baer. However, LO Funds is 1.18 times more volatile than Julius Baer Edelweiss. It trades about -0.18 of its potential returns per unit of risk. Julius Baer Edelweiss is currently generating about -0.23 per unit of risk. If you would invest  20,821  in LO Funds Swiss on September 26, 2024 and sell it today you would lose (457.00) from holding LO Funds Swiss or give up 2.19% of portfolio value over 90 days.

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

LO Funds Swiss  vs.  Julius Baer Edelweiss

LO Funds Swiss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LO Funds Swiss has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Julius Baer Edelweiss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Julius Baer Edelweiss has generated negative risk-adjusted returns adding no value to fund investors. Despite latest unsteady performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with LO Funds and Julius Baer

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

The idea behind LO Funds Swiss and Julius Baer Edelweiss 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.