Correlation Between Segall Bryant and Smallcap Growth

Can any of the company-specific risk be diversified away by investing in both Segall Bryant and Smallcap Growth 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 Segall Bryant and Smallcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Segall Bryant Hamill and Smallcap Growth Fund, you can compare the effects of market volatilities on Segall Bryant and Smallcap Growth 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 Segall Bryant with a short position of Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Segall Bryant and Smallcap Growth.

Diversification Opportunities for Segall Bryant and Smallcap Growth

-0.55

Correlation Coefficient

Segall Bryant  Smallcap Growth

Excellent diversification

The 3 months correlation between Segall and Smallcap is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Segall Bryant Hamill and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth and Segall Bryant 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 Segall Bryant Hamill are associated (or correlated) with Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Segall Bryant i.e., Segall Bryant and Smallcap Growth go up and down completely randomly.

Pair Corralation between Segall Bryant and Smallcap Growth

Assuming the 90 days horizon Segall Bryant Hamill is expected to under-perform the Smallcap Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Segall Bryant Hamill is 1.43 times less risky than Smallcap Growth. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Smallcap Growth Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,549  in Smallcap Growth Fund on September 13, 2024 and sell it today you would earn a total of  162.00  from holding Smallcap Growth Fund or generate 10.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Segall Bryant Hamill  vs.  Smallcap Growth Fund

Segall Bryant Hamill

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Segall Bryant Hamill has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Segall Bryant is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smallcap Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Growth Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Smallcap Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Segall Bryant and Smallcap Growth

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

The idea behind Segall Bryant Hamill and Smallcap Growth Fund 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.