Correlation Between Charles Schwab and Knightscope
Can any of the company-specific risk be diversified away by investing in both Charles Schwab and Knightscope 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 Knightscope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charles Schwab Corp and Knightscope, you can compare the effects of market volatilities on Charles Schwab and Knightscope 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 Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Schwab and Knightscope.
Diversification Opportunities for Charles Schwab and Knightscope
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charles and Knightscope is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Charles Schwab Corp and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope 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 Charles Schwab Corp are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Charles Schwab i.e., Charles Schwab and Knightscope go up and down completely randomly.
Pair Corralation between Charles Schwab and Knightscope
Given the investment horizon of 90 days Charles Schwab is expected to generate 1.39 times less return on investment than Knightscope. But when comparing it to its historical volatility, Charles Schwab Corp is 6.23 times less risky than Knightscope. It trades about 0.31 of its potential returns per unit of risk. Knightscope is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,586 in Knightscope on August 28, 2024 and sell it today you would earn a total of 17.00 from holding Knightscope or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charles Schwab Corp vs. Knightscope
Performance |
| Timeline |
| Charles Schwab Corp |
| Knightscope |
Charles Schwab and Knightscope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charles Schwab and Knightscope
The main advantage of trading using opposite Charles Schwab and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charles Schwab position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.| Charles Schwab vs. Goldman Sachs Group | Charles Schwab vs. Riot Blockchain | Charles Schwab vs. Jefferies Financial Group | Charles Schwab vs. Marathon Digital Holdings |
| Knightscope vs. Plexus Corp | Knightscope vs. Jabil Circuit | Knightscope vs. Sanmina | Knightscope vs. Methode Electronics |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |