Correlation Between Synchrony Swiss and Julius Baer

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

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

Diversification Opportunities for Synchrony Swiss and Julius Baer

-0.49

Correlation Coefficient

Synchrony Swiss  Julius Baer

Very good diversification

The 3 months correlation between Synchrony and Julius is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Swiss Real 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 Synchrony Swiss 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 Synchrony Swiss Real 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 Synchrony Swiss i.e., Synchrony Swiss and Julius Baer go up and down completely randomly.

Pair Corralation between Synchrony Swiss and Julius Baer

Assuming the 90 days trading horizon Synchrony Swiss is expected to generate 1.85 times less return on investment than Julius Baer. But when comparing it to its historical volatility, Synchrony Swiss Real is 1.18 times less risky than Julius Baer. It trades about 0.1 of its potential returns per unit of risk. Julius Baer Edelweiss is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  14,960  in Julius Baer Edelweiss on October 15, 2024 and sell it today you would earn a total of  198.00  from holding Julius Baer Edelweiss or generate 1.32% return on investment over 90 days.

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

Synchrony Swiss Real  vs.  Julius Baer Edelweiss

Synchrony Swiss Real

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Swiss Real are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Synchrony Swiss is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional 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 somewhat strong basic indicators, Julius Baer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Synchrony Swiss and Julius Baer

The main advantage of trading using opposite Synchrony Swiss and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Swiss 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 Synchrony Swiss Real 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.