Correlation Between Sulzer AG and Julius Baer
Can any of the company-specific risk be diversified away by investing in both Sulzer AG 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 Sulzer AG and Julius Baer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and Julius Baer Gruppe, you can compare the effects of market volatilities on Sulzer AG 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 Sulzer AG with a short position of Julius Baer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Julius Baer.
Diversification Opportunities for Sulzer AG and Julius Baer
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sulzer and Julius is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG and Julius Baer Gruppe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Baer Gruppe and Sulzer AG 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 Sulzer AG 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 Gruppe has no effect on the direction of Sulzer AG i.e., Sulzer AG and Julius Baer go up and down completely randomly.
Pair Corralation between Sulzer AG and Julius Baer
Assuming the 90 days trading horizon Sulzer AG is expected to generate 0.88 times more return on investment than Julius Baer. However, Sulzer AG is 1.13 times less risky than Julius Baer. It trades about 0.1 of its potential returns per unit of risk. Julius Baer Gruppe is currently generating about 0.03 per unit of risk. If you would invest 6,596 in Sulzer AG on August 28, 2024 and sell it today you would earn a total of 6,424 from holding Sulzer AG or generate 97.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sulzer AG vs. Julius Baer Gruppe
Performance |
| Timeline |
| Sulzer AG |
| Julius Baer Gruppe |
Sulzer AG and Julius Baer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sulzer AG and Julius Baer
The main advantage of trading using opposite Sulzer AG and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG 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 Sulzer AG and Julius Baer Gruppe 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.| Julius Baer vs. Bachem Holding AG | Julius Baer vs. Kudelski | Julius Baer vs. Alpine Select AG | Julius Baer vs. BB Biotech AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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