Correlation Between KBC Groep and Julius Baer

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

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

Diversification Opportunities for KBC Groep and Julius Baer

0.69

Correlation Coefficient

KBC Groep  Julius Baer

Poor diversification

The 3 months correlation between KBC and Julius is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Julius Baer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Baer Group and KBC Groep 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 KBC Groep NV 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 Group has no effect on the direction of KBC Groep i.e., KBC Groep and Julius Baer go up and down completely randomly.

Pair Corralation between KBC Groep and Julius Baer

Assuming the 90 days horizon KBC Groep NV is expected to generate 0.78 times more return on investment than Julius Baer. However, KBC Groep NV is 1.28 times less risky than Julius Baer. It trades about 0.2 of its potential returns per unit of risk. Julius Baer Group is currently generating about 0.08 per unit of risk. If you would invest  3,858  in KBC Groep NV on December 28, 2024 and sell it today you would earn a total of  872.00  from holding KBC Groep NV or generate 22.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

KBC Groep NV  vs.  Julius Baer Group

KBC Groep NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Groep NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, KBC Groep showed solid returns over the last few months and may actually be approaching a breakup point.

Julius Baer Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Julius Baer Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Julius Baer may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KBC Groep and Julius Baer

The main advantage of trading using opposite KBC Groep and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep 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 KBC Groep NV and Julius Baer Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..