Correlation Between Segall Bryant and Smallcap World

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

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

Diversification Opportunities for Segall Bryant and Smallcap World

0.98

Correlation Coefficient

Segall Bryant  Smallcap World

Almost no diversification

The 3 months correlation between Segall and Smallcap is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Segall Bryant Hamill and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World and Segall Bryant 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 Segall Bryant Hamill are associated (or correlated) with Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Segall Bryant i.e., Segall Bryant and Smallcap World go up and down completely randomly.

Pair Corralation between Segall Bryant and Smallcap World

Assuming the 90 days horizon Segall Bryant Hamill is expected to generate 0.93 times more return on investment than Smallcap World. However, Segall Bryant Hamill is 1.07 times less risky than Smallcap World. It trades about 0.27 of its potential returns per unit of risk. Smallcap World Fund is currently generating about 0.23 per unit of risk. If you would invest  1,303  in Segall Bryant Hamill on April 15, 2025 and sell it today you would earn a total of  45.00  from holding Segall Bryant Hamill or generate 3.45% return on investment over 90 days.

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

Segall Bryant Hamill  vs.  Smallcap World Fund

Segall Bryant Hamill

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Segall Bryant Hamill are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Segall Bryant showed solid returns over the last few months and may actually be approaching a breakup point.

Smallcap World

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap World Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Smallcap World showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Segall Bryant and Smallcap World

The main advantage of trading using opposite Segall Bryant and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Segall Bryant position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World's long position.

The idea behind Segall Bryant Hamill and Smallcap World Fund 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.