Correlation Between Steel Dynamics and Segall Bryant
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics 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 Steel Dynamics and Segall Bryant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Segall Bryant Hamill, you can compare the effects of market volatilities on Steel Dynamics 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 Steel Dynamics with a short position of Segall Bryant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Segall Bryant.
Diversification Opportunities for Steel Dynamics and Segall Bryant
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Segall is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics i.e., Steel Dynamics and Segall Bryant go up and down completely randomly.
Pair Corralation between Steel Dynamics and Segall Bryant
Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.1 times less return on investment than Segall Bryant. In addition to that, Steel Dynamics is 2.68 times more volatile than Segall Bryant Hamill. It trades about 0.03 of its total potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.08 per unit of volatility. If you would invest 672.00 in Segall Bryant Hamill on December 2, 2024 and sell it today you would earn a total of 234.00 from holding Segall Bryant Hamill or generate 34.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Dynamics vs. Segall Bryant Hamill
Performance |
Timeline |
Steel Dynamics |
Segall Bryant Hamill |
Steel Dynamics and Segall Bryant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Dynamics and Segall Bryant
The main advantage of trading using opposite Steel Dynamics and Segall Bryant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics 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.Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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