Correlation Between Knife River and Segall Bryant
Can any of the company-specific risk be diversified away by investing in both Knife River 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 Knife River and Segall Bryant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Segall Bryant Hamill, you can compare the effects of market volatilities on Knife River 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 Knife River with a short position of Segall Bryant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Segall Bryant.
Diversification Opportunities for Knife River and Segall Bryant
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knife and Segall is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Knife River 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 Knife River 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 Knife River 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 Knife River i.e., Knife River and Segall Bryant go up and down completely randomly.
Pair Corralation between Knife River and Segall Bryant
Considering the 90-day investment horizon Knife River is expected to generate 2.89 times more return on investment than Segall Bryant. However, Knife River is 2.89 times more volatile than Segall Bryant Hamill. It trades about 0.13 of its potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.11 per unit of risk. If you would invest 3,551 in Knife River on August 30, 2024 and sell it today you would earn a total of 6,724 from holding Knife River or generate 189.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 83.11% |
| Values | Daily Returns |
Knife River vs. Segall Bryant Hamill
Performance |
| Timeline |
| Knife River |
| Segall Bryant Hamill |
Knife River and Segall Bryant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Segall Bryant
The main advantage of trading using opposite Knife River and Segall Bryant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River 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.| Knife River vs. Cemex SAB de | Knife River vs. Boise Cascad Llc | Knife River vs. CRH PLC ADR | Knife River vs. Eagle Materials |
| Segall Bryant vs. Davis Select International | Segall Bryant vs. Tidal ETF Trust | Segall Bryant vs. Principal Value ETF | Segall Bryant vs. WisdomTree Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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