Correlation Between Ford and Segall Bryant
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Segall Bryant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Segall Bryant Hamill, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Segall Bryant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Segall Bryant.
Diversification Opportunities for Ford and Segall Bryant
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Segall is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and Segall Bryant go up and down completely randomly.
Pair Corralation between Ford and Segall Bryant
Taking into account the 90-day investment horizon Ford is expected to generate 2.33 times less return on investment than Segall Bryant. In addition to that, Ford is 1.94 times more volatile than Segall Bryant Hamill. It trades about 0.01 of its total potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.05 per unit of volatility. If you would invest 1,289 in Segall Bryant Hamill on August 26, 2024 and sell it today you would earn a total of 362.00 from holding Segall Bryant Hamill or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Segall Bryant Hamill
Performance |
| Timeline |
| Ford Motor |
| Segall Bryant Hamill |
Ford and Segall Bryant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Segall Bryant
The main advantage of trading using opposite Ford and Segall Bryant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.| Segall Bryant vs. Segall Bryant Hamill | Segall Bryant vs. Segall Bryant Hamill | Segall Bryant vs. Segall Bryant Hamill | Segall Bryant vs. Segall Bryant Hamill |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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