Correlation Between BGC and Charles Schwab
Can any of the company-specific risk be diversified away by investing in both BGC and Charles Schwab 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 BGC and Charles Schwab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGC Group and The Charles Schwab, you can compare the effects of market volatilities on BGC and Charles Schwab 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 BGC with a short position of Charles Schwab. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGC and Charles Schwab.
Diversification Opportunities for BGC and Charles Schwab
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGC and Charles is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BGC Group and The Charles Schwab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles Schwab and BGC 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 BGC Group are associated (or correlated) with Charles Schwab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles Schwab has no effect on the direction of BGC i.e., BGC and Charles Schwab go up and down completely randomly.
Pair Corralation between BGC and Charles Schwab
Considering the 90-day investment horizon BGC Group is expected to generate 2.23 times more return on investment than Charles Schwab. However, BGC is 2.23 times more volatile than The Charles Schwab. It trades about 0.08 of its potential returns per unit of risk. The Charles Schwab is currently generating about 0.02 per unit of risk. If you would invest 425.00 in BGC Group on August 27, 2024 and sell it today you would earn a total of 535.00 from holding BGC Group or generate 125.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGC Group vs. The Charles Schwab
Performance |
| Timeline |
| BGC Group |
| Charles Schwab |
BGC and Charles Schwab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGC and Charles Schwab
The main advantage of trading using opposite BGC and Charles Schwab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGC position performs unexpectedly, Charles Schwab 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 Charles Schwab will offset losses from the drop in Charles Schwab's long position.| BGC vs. Universal | BGC vs. Mid Atlantic Home Health | BGC vs. Molson Coors Brewing | BGC vs. Bassett Furniture Industries |
| Charles Schwab vs. The Charles Schwab | Charles Schwab vs. JPMorgan Chase Co | Charles Schwab vs. Morgan Stanley | Charles Schwab vs. JPMorgan Chase Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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