Correlation Between Julius Baer and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Julius Baer and Bachem Holding 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 Bachem Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Julius Baer Gruppe and Bachem Holding AG, you can compare the effects of market volatilities on Julius Baer and Bachem Holding 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 Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Julius Baer and Bachem Holding.
Diversification Opportunities for Julius Baer and Bachem Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Julius and Bachem is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Julius Baer Gruppe and Bachem Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bachem Holding AG 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 Gruppe are associated (or correlated) with Bachem Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bachem Holding AG has no effect on the direction of Julius Baer i.e., Julius Baer and Bachem Holding go up and down completely randomly.
Pair Corralation between Julius Baer and Bachem Holding
Assuming the 90 days trading horizon Julius Baer Gruppe is expected to generate 0.87 times more return on investment than Bachem Holding. However, Julius Baer Gruppe is 1.15 times less risky than Bachem Holding. It trades about 0.04 of its potential returns per unit of risk. Bachem Holding AG is currently generating about -0.06 per unit of risk. If you would invest 5,382 in Julius Baer Gruppe on August 28, 2024 and sell it today you would earn a total of 366.00 from holding Julius Baer Gruppe or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Julius Baer Gruppe vs. Bachem Holding AG
Performance |
| Timeline |
| Julius Baer Gruppe |
| Bachem Holding AG |
Julius Baer and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Julius Baer and Bachem Holding
The main advantage of trading using opposite Julius Baer and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Julius Baer position performs unexpectedly, Bachem Holding 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 Bachem Holding will offset losses from the drop in Bachem Holding's long position.| Julius Baer vs. Bachem Holding AG | Julius Baer vs. Kudelski | Julius Baer vs. Alpine Select AG | Julius Baer vs. BB Biotech AG |
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Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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