Correlation Between Charles Schwab and BGC
Can any of the company-specific risk be diversified away by investing in both Charles Schwab and BGC 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 Charles Schwab and BGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Charles Schwab and BGC Group, you can compare the effects of market volatilities on Charles Schwab and BGC 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 Charles Schwab with a short position of BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Schwab and BGC.
Diversification Opportunities for Charles Schwab and BGC
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charles and BGC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Charles Schwab and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group and Charles Schwab 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 The Charles Schwab are associated (or correlated) with BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Charles Schwab i.e., Charles Schwab and BGC go up and down completely randomly.
Pair Corralation between Charles Schwab and BGC
Assuming the 90 days trading horizon The Charles Schwab is expected to under-perform the BGC. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Charles Schwab is 3.2 times less risky than BGC. The preferred stock trades about -0.03 of its potential returns per unit of risk. The BGC Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 973.00 in BGC Group on August 24, 2024 and sell it today you would earn a total of 43.00 from holding BGC Group or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Charles Schwab vs. BGC Group
Performance |
| Timeline |
| Charles Schwab |
| BGC Group |
Charles Schwab and BGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charles Schwab and BGC
The main advantage of trading using opposite Charles Schwab and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charles Schwab position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.| Charles Schwab vs. The Charles Schwab | Charles Schwab vs. JPMorgan Chase Co | Charles Schwab vs. Morgan Stanley | Charles Schwab vs. JPMorgan Chase Co |
| BGC vs. Cumberland Pharmaceuticals | BGC vs. Chester Mining | BGC vs. Electrovaya Common Shares | BGC vs. Teleflex Incorporated |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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