Correlation Between Baloise Swiss and Julius Baer

Can any of the company-specific risk be diversified away by investing in both Baloise 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 Baloise 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 Baloise Swiss Property and Julius Baer Edelweiss, you can compare the effects of market volatilities on Baloise 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 Baloise Swiss with a short position of Julius Baer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Swiss and Julius Baer.

Diversification Opportunities for Baloise Swiss and Julius Baer

-0.57

Correlation Coefficient

Baloise Swiss  Julius Baer

Excellent diversification

The 3 months correlation between Baloise and Julius is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Swiss Property 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 Baloise 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 Baloise Swiss Property 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 Baloise Swiss i.e., Baloise Swiss and Julius Baer go up and down completely randomly.

Pair Corralation between Baloise Swiss and Julius Baer

Assuming the 90 days trading horizon Baloise Swiss is expected to generate 1.03 times less return on investment than Julius Baer. In addition to that, Baloise Swiss is 1.14 times more volatile than Julius Baer Edelweiss. It trades about 0.04 of its total potential returns per unit of risk. Julius Baer Edelweiss is currently generating about 0.04 per unit of volatility. If you would invest  14,371  in Julius Baer Edelweiss on October 14, 2024 and sell it today you would earn a total of  787.00  from holding Julius Baer Edelweiss or generate 5.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.91%
Values	Daily Returns

Baloise Swiss Property  vs.  Julius Baer Edelweiss

Baloise Swiss Property

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Swiss Property are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively abnormal basic indicators, Baloise Swiss may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baloise Swiss and Julius Baer

The main advantage of trading using opposite Baloise Swiss and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise 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 Baloise Swiss Property 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.