Correlation Between Health Care and Segall Bryant

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

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

Diversification Opportunities for Health Care and Segall Bryant

0.26

Correlation Coefficient

Health Care  Segall Bryant

Modest diversification

The 3 months correlation between Health and Segall is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Ultrasector 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 Health Care 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 Health Care Ultrasector 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 Health Care i.e., Health Care and Segall Bryant go up and down completely randomly.

Pair Corralation between Health Care and Segall Bryant

Assuming the 90 days horizon Health Care Ultrasector is expected to under-perform the Segall Bryant. But the mutual fund apears to be less risky and, when comparing its historical volatility, Health Care Ultrasector is 1.12 times less risky than Segall Bryant. The mutual fund trades about -0.23 of its potential returns per unit of risk. The Segall Bryant Hamill is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,317  in Segall Bryant Hamill on October 9, 2024 and sell it today you would lose (42.00) from holding Segall Bryant Hamill or give up 3.19% of portfolio value over 90 days.

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

Health Care Ultrasector  vs.  Segall Bryant Hamill

Health Care Ultrasector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Health Care Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

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 basic indicators, Segall Bryant is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Health Care and Segall Bryant

The main advantage of trading using opposite Health Care and Segall Bryant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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 Health Care Ultrasector 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.