Correlation Between Synchrony Financial and Schroders Investment
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Schroders Investment 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 Schroders Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Schroders Investment Trusts, you can compare the effects of market volatilities on Synchrony Financial and Schroders Investment 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 Schroders Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Schroders Investment.
Diversification Opportunities for Synchrony Financial and Schroders Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synchrony and Schroders is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Schroders Investment Trusts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders Investment 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 Schroders Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders Investment has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Schroders Investment go up and down completely randomly.
Pair Corralation between Synchrony Financial and Schroders Investment
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.85 times more return on investment than Schroders Investment. However, Synchrony Financial is 1.85 times more volatile than Schroders Investment Trusts. It trades about 0.08 of its potential returns per unit of risk. Schroders Investment Trusts is currently generating about 0.07 per unit of risk. If you would invest 6,773 in Synchrony Financial on November 5, 2024 and sell it today you would earn a total of 146.00 from holding Synchrony Financial or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Synchrony Financial vs. Schroders Investment Trusts
Performance |
| Timeline |
| Synchrony Financial |
| Schroders Investment |
Synchrony Financial and Schroders Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Schroders Investment
The main advantage of trading using opposite Synchrony Financial and Schroders Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Schroders Investment 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 Schroders Investment will offset losses from the drop in Schroders Investment's long position.| Synchrony Financial vs. Broadcom | Synchrony Financial vs. Geely Automobile Holdings | Synchrony Financial vs. G5 Entertainment AB | Synchrony Financial vs. AcadeMedia AB |
| Schroders Investment vs. Playtech Plc | Schroders Investment vs. Alfa Financial Software | Schroders Investment vs. Verizon Communications | Schroders Investment vs. Vitec Software Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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