Correlation Between Synchrony Financial and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Adriatic Metals 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 Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Adriatic Metals, you can compare the effects of market volatilities on Synchrony Financial and Adriatic Metals 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 Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Adriatic Metals.
Diversification Opportunities for Synchrony Financial and Adriatic Metals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Adriatic is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Adriatic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals 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 Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Adriatic Metals go up and down completely randomly.
Pair Corralation between Synchrony Financial and Adriatic Metals
Assuming the 90 days trading horizon Synchrony Financial is expected to under-perform the Adriatic Metals. But the stock apears to be less risky and, when comparing its historical volatility, Synchrony Financial is 1.3 times less risky than Adriatic Metals. The stock trades about -0.19 of its potential returns per unit of risk. The Adriatic Metals is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 20,300 in Adriatic Metals on October 16, 2024 and sell it today you would lose (1,080) from holding Adriatic Metals or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Synchrony Financial vs. Adriatic Metals
Performance |
| Timeline |
| Synchrony Financial |
| Adriatic Metals |
Synchrony Financial and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Adriatic Metals
The main advantage of trading using opposite Synchrony Financial and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Synchrony Financial vs. Guild Esports Plc | Synchrony Financial vs. Intermediate Capital Group | Synchrony Financial vs. TBC Bank Group | Synchrony Financial vs. Sparebanken Vest |
| Adriatic Metals vs. Auto Trader Group | Adriatic Metals vs. FinecoBank SpA | Adriatic Metals vs. Cembra Money Bank | Adriatic Metals vs. Sydbank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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