Correlation Between Julius Baer and LO Funds

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

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

Diversification Opportunities for Julius Baer and LO Funds

0.95

Correlation Coefficient

Julius Baer  LO Funds

Almost no diversification

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

Pair Corralation between Julius Baer and LO Funds

Assuming the 90 days trading horizon Julius Baer Edelweiss is expected to under-perform the LO Funds. But the fund apears to be less risky and, when comparing its historical volatility, Julius Baer Edelweiss is 1.18 times less risky than LO Funds. The fund trades about -0.23 of its potential returns per unit of risk. The LO Funds Swiss is currently generating about -0.18 of returns per unit of risk over similar time horizon. 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

Julius Baer Edelweiss  vs.  LO Funds Swiss

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.

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.

Pair Trading with Julius Baer and LO Funds

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

The idea behind Julius Baer Edelweiss and LO Funds Swiss 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 CEOs Directory module to screen CEOs from public companies around the world.