Correlation Between Charles Schwab and Cohen
Can any of the company-specific risk be diversified away by investing in both Charles Schwab and Cohen 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 Cohen 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 Cohen Company, you can compare the effects of market volatilities on Charles Schwab and Cohen 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 Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Schwab and Cohen.
Diversification Opportunities for Charles Schwab and Cohen
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charles and Cohen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Charles Schwab and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company 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 Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of Charles Schwab i.e., Charles Schwab and Cohen go up and down completely randomly.
Pair Corralation between Charles Schwab and Cohen
Assuming the 90 days trading horizon Charles Schwab is expected to generate 17.43 times less return on investment than Cohen. But when comparing it to its historical volatility, The Charles Schwab is 4.58 times less risky than Cohen. It trades about 0.06 of its potential returns per unit of risk. Cohen Company is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 818.00 in Cohen Company on September 1, 2024 and sell it today you would earn a total of 192.00 from holding Cohen Company or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Charles Schwab vs. Cohen Company
Performance |
| Timeline |
| Charles Schwab |
| Cohen Company |
Charles Schwab and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charles Schwab and Cohen
The main advantage of trading using opposite Charles Schwab and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charles Schwab position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen'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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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