Correlation Between Synchrony Financial and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Uniper SE 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 Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Uniper SE, you can compare the effects of market volatilities on Synchrony Financial and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Uniper SE.
Diversification Opportunities for Synchrony Financial and Uniper SE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Uniper is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Uniper SE go up and down completely randomly.
Pair Corralation between Synchrony Financial and Uniper SE
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 2.02 times more return on investment than Uniper SE. However, Synchrony Financial is 2.02 times more volatile than Uniper SE. It trades about 0.24 of its potential returns per unit of risk. Uniper SE is currently generating about -0.06 per unit of risk. If you would invest 5,507 in Synchrony Financial on September 3, 2024 and sell it today you would earn a total of 1,245 from holding Synchrony Financial or generate 22.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Synchrony Financial vs. Uniper SE
Performance |
| Timeline |
| Synchrony Financial |
| Uniper SE |
Synchrony Financial and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Uniper SE
The main advantage of trading using opposite Synchrony Financial and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Synchrony Financial vs. Endeavour Mining Corp | Synchrony Financial vs. Silvercorp Metals | Synchrony Financial vs. GreenX Metals | Synchrony Financial vs. bet at home AG |
| Uniper SE vs. Bytes Technology | Uniper SE vs. Livermore Investments Group | Uniper SE vs. FC Investment Trust | Uniper SE vs. Universal Display Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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