Correlation Between Howard Bancorp and Charles Schwab

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Can any of the company-specific risk be diversified away by investing in both Howard Bancorp 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 Howard Bancorp and Charles Schwab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Howard Bancorp and The Charles Schwab, you can compare the effects of market volatilities on Howard Bancorp 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 Howard Bancorp with a short position of Charles Schwab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howard Bancorp and Charles Schwab.

Diversification Opportunities for Howard Bancorp and Charles Schwab

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Howard and Charles is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Howard Bancorp Inc and The Charles Schwab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles Schwab and Howard Bancorp 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 Howard Bancorp 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 Howard Bancorp i.e., Howard Bancorp and Charles Schwab go up and down completely randomly.

Pair Corralation between Howard Bancorp and Charles Schwab

If you would invest  7,047  in The Charles Schwab on July 6, 2022 and sell it today you would earn a total of  575.00  from holding The Charles Schwab or generate 8.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy4.76%
ValuesDaily Returns

Howard Bancorp Inc  vs.  The Charles Schwab

 Performance (%) 
       Timeline  
Howard Bancorp 
Howard Performance
0 of 100
Over the last 90 days Howard Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Howard Bancorp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Charles Schwab 
Charles Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Charles Schwab are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical indicators, Charles Schwab showed solid returns over the last few months and may actually be approaching a breakup point.

Charles Price Channel

Howard Bancorp and Charles Schwab Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Howard Bancorp and Charles Schwab

The main advantage of trading using opposite Howard Bancorp and Charles Schwab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howard Bancorp 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.
Howard Bancorp vs. Amazon Inc
The idea behind Howard Bancorp and The Charles Schwab 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.
Charles Schwab vs. Amazon Inc
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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