Correlation Between Westcore Small-cap and Segall Bryant

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

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

Diversification Opportunities for Westcore Small-cap and Segall Bryant

0.98

Correlation Coefficient

Westcore Small-cap  Segall Bryant

Almost no diversification

The 3 months correlation between Westcore and Segall is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Small Cap Growth and Segall Bryant Hamill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segall Bryant Hamill and Westcore Small-cap 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 Westcore Small Cap Growth are associated (or correlated) with Segall Bryant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segall Bryant Hamill has no effect on the direction of Westcore Small-cap i.e., Westcore Small-cap and Segall Bryant go up and down completely randomly.

Pair Corralation between Westcore Small-cap and Segall Bryant

Assuming the 90 days horizon Westcore Small Cap Growth is expected to generate 1.68 times more return on investment than Segall Bryant. However, Westcore Small-cap is 1.68 times more volatile than Segall Bryant Hamill. It trades about 0.22 of its potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.16 per unit of risk. If you would invest  1,972  in Westcore Small Cap Growth on September 3, 2024 and sell it today you would earn a total of  336.00  from holding Westcore Small Cap Growth or generate 17.04% return on investment over 90 days.

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

Westcore Small Cap Growth  vs.  Segall Bryant Hamill

Westcore Small Cap

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Westcore Small Cap Growth are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Westcore Small-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Segall Bryant Hamill

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Segall Bryant Hamill are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Segall Bryant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Westcore Small-cap and Segall Bryant

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

The idea behind Westcore Small Cap Growth and Segall Bryant Hamill 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.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.