Correlation Between Synchrony Financial and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Ubisoft Entertainment 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 Synchrony Financial and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Ubisoft Entertainment, you can compare the effects of market volatilities on Synchrony Financial and Ubisoft Entertainment 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 Synchrony Financial with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Ubisoft Entertainment.
Diversification Opportunities for Synchrony Financial and Ubisoft Entertainment
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Ubisoft is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Synchrony Financial 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 Synchrony Financial are associated (or correlated) with Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Synchrony Financial and Ubisoft Entertainment
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.72 times more return on investment than Ubisoft Entertainment. However, Synchrony Financial is 1.38 times less risky than Ubisoft Entertainment. It trades about 0.23 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.23 per unit of risk. If you would invest 6,552 in Synchrony Financial on October 24, 2024 and sell it today you would earn a total of 421.00 from holding Synchrony Financial or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Synchrony Financial vs. Ubisoft Entertainment
Performance |
| Timeline |
| Synchrony Financial |
| Ubisoft Entertainment |
Synchrony Financial and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Ubisoft Entertainment
The main advantage of trading using opposite Synchrony Financial and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Ubisoft Entertainment 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 Ubisoft Entertainment will offset losses from the drop in Ubisoft Entertainment's long position.| Synchrony Financial vs. Symphony Environmental Technologies | Synchrony Financial vs. Ecofin Global Utilities | Synchrony Financial vs. Tata Steel Limited | Synchrony Financial vs. Futura Medical |
| Ubisoft Entertainment vs. UNIQA Insurance Group | Ubisoft Entertainment vs. Ashtead Technology Holdings | Ubisoft Entertainment vs. St Galler Kantonalbank | Ubisoft Entertainment vs. Ally Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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