Correlation Between CSIF III and Julius Baer

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

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

Diversification Opportunities for CSIF III and Julius Baer

-0.66

Correlation Coefficient

CSIF III  Julius Baer

Excellent diversification

The 3 months correlation between CSIF and Julius is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CSIF III Eq 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 CSIF III 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 CSIF III Eq 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 CSIF III i.e., CSIF III and Julius Baer go up and down completely randomly.

Pair Corralation between CSIF III and Julius Baer

Assuming the 90 days trading horizon CSIF III Eq is expected to generate 0.99 times more return on investment than Julius Baer. However, CSIF III Eq is 1.01 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 0.04 per unit of risk. If you would invest  120,226  in CSIF III Eq on September 26, 2024 and sell it today you would earn a total of  49,205  from holding CSIF III Eq or generate 40.93% return on investment over 90 days.

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

CSIF III Eq  vs.  Julius Baer Edelweiss

CSIF III Eq

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF III Eq are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, CSIF III is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 CSIF III and Julius Baer

The main advantage of trading using opposite CSIF III and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSIF III 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 CSIF III Eq 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.