Correlation Between Synchrony Financial and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Schweiter Technologies 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 Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Schweiter Technologies AG, you can compare the effects of market volatilities on Synchrony Financial and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Schweiter Technologies.
Diversification Opportunities for Synchrony Financial and Schweiter Technologies
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Synchrony and Schweiter is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Synchrony Financial and Schweiter Technologies
Assuming the 90 days trading horizon Synchrony Financial is expected to under-perform the Schweiter Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Synchrony Financial is 1.06 times less risky than Schweiter Technologies. The stock trades about -0.39 of its potential returns per unit of risk. The Schweiter Technologies AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 46,400 in Schweiter Technologies AG on November 28, 2024 and sell it today you would lose (400.00) from holding Schweiter Technologies AG or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Synchrony Financial vs. Schweiter Technologies AG
Performance |
| Timeline |
| Synchrony Financial |
| Schweiter Technologies |
Synchrony Financial and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Schweiter Technologies
The main advantage of trading using opposite Synchrony Financial and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Synchrony Financial vs. Gamma Communications PLC | Synchrony Financial vs. Verizon Communications | Synchrony Financial vs. Orient Telecoms | Synchrony Financial vs. MTI Wireless Edge |
| Schweiter Technologies vs. Naked Wines plc | Schweiter Technologies vs. Synthomer plc | Schweiter Technologies vs. Zegona Communications Plc | Schweiter Technologies vs. Bigblu Broadband PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |