Correlation Between Synchrony Financial and Dunedin Enterprise
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Dunedin Enterprise 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 Dunedin Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Dunedin Enterprise Investment, you can compare the effects of market volatilities on Synchrony Financial and Dunedin Enterprise 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 Dunedin Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Dunedin Enterprise.
Diversification Opportunities for Synchrony Financial and Dunedin Enterprise
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Dunedin is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Dunedin Enterprise Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunedin Enterprise 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 Dunedin Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunedin Enterprise has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Dunedin Enterprise go up and down completely randomly.
Pair Corralation between Synchrony Financial and Dunedin Enterprise
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.98 times more return on investment than Dunedin Enterprise. However, Synchrony Financial is 1.98 times more volatile than Dunedin Enterprise Investment. It trades about 0.22 of its potential returns per unit of risk. Dunedin Enterprise Investment is currently generating about 0.22 per unit of risk. If you would invest 6,424 in Synchrony Financial on October 20, 2024 and sell it today you would earn a total of 430.00 from holding Synchrony Financial or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. Dunedin Enterprise Investment
Performance |
| Timeline |
| Synchrony Financial |
| Dunedin Enterprise |
Synchrony Financial and Dunedin Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Dunedin Enterprise
The main advantage of trading using opposite Synchrony Financial and Dunedin Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Dunedin Enterprise 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 Dunedin Enterprise will offset losses from the drop in Dunedin Enterprise's long position.| Synchrony Financial vs. Westlake Chemical Corp | Synchrony Financial vs. Eastman Chemical Co | Synchrony Financial vs. Zegona Communications Plc | Synchrony Financial vs. Gamma Communications PLC |
| Dunedin Enterprise vs. Waste Management | Dunedin Enterprise vs. Qurate Retail Series | Dunedin Enterprise vs. Impax Asset Management | Dunedin Enterprise vs. Eastinco Mining Exploration |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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