Correlation Between Ab Small and Segall Bryant
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Segall Bryant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Segall Bryant Hamill, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Segall Bryant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Segall Bryant.
Diversification Opportunities for Ab Small and Segall Bryant
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QUAIX and Segall is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Segall Bryant go up and down completely randomly.
Pair Corralation between Ab Small and Segall Bryant
Assuming the 90 days horizon Ab Small Cap is expected to generate 0.97 times more return on investment than Segall Bryant. However, Ab Small Cap is 1.03 times less risky than Segall Bryant. It trades about 0.12 of its potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.08 per unit of risk. If you would invest 6,501 in Ab Small Cap on September 9, 2024 and sell it today you would earn a total of 1,431 from holding Ab Small Cap or generate 22.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Small Cap vs. Segall Bryant Hamill
Performance |
Timeline |
Ab Small Cap |
Segall Bryant Hamill |
Ab Small and Segall Bryant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Small and Segall Bryant
The main advantage of trading using opposite Ab Small and Segall Bryant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.Ab Small vs. Gmo Resources Fund | Ab Small vs. World Energy Fund | Ab Small vs. Hennessy Bp Energy | Ab Small vs. Calvert Global Energy |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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