Correlation Between Julius Baer and GAM Holding

Can any of the company-specific risk be diversified away by investing in both Julius Baer and GAM 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 GAM 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 GAM Holding AG, you can compare the effects of market volatilities on Julius Baer and GAM 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 GAM Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Julius Baer and GAM Holding.

Diversification Opportunities for Julius Baer and GAM Holding

-0.45

Correlation Coefficient

Julius Baer  GAM Holding

Very good diversification

The 3 months correlation between Julius and GAM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Julius Baer Gruppe and GAM Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAM 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 GAM Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAM Holding AG has no effect on the direction of Julius Baer i.e., Julius Baer and GAM Holding go up and down completely randomly.

Pair Corralation between Julius Baer and GAM Holding

Assuming the 90 days trading horizon Julius Baer Gruppe is expected to generate 0.24 times more return on investment than GAM Holding. However, Julius Baer Gruppe is 4.13 times less risky than GAM Holding. It trades about 0.15 of its potential returns per unit of risk. GAM Holding AG is currently generating about -0.01 per unit of risk. If you would invest  5,260  in Julius Baer Gruppe on September 5, 2024 and sell it today you would earn a total of  532.00  from holding Julius Baer Gruppe or generate 10.11% 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.  GAM Holding AG

Julius Baer Gruppe

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Julius Baer Gruppe are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Julius Baer showed solid returns over the last few months and may actually be approaching a breakup point.

GAM Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAM Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's primary indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Julius Baer and GAM Holding

The main advantage of trading using opposite Julius Baer and GAM Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Julius Baer position performs unexpectedly, GAM 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 GAM Holding will offset losses from the drop in GAM Holding's long position.

The idea behind Julius Baer Gruppe and GAM Holding AG 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.