Correlation Between Synchrony Financial and Empire Metals
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Empire 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 Empire 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 Empire Metals Limited, you can compare the effects of market volatilities on Synchrony Financial and Empire 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Empire Metals.
Diversification Opportunities for Synchrony Financial and Empire Metals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Synchrony and Empire is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Empire Metals go up and down completely randomly.
Pair Corralation between Synchrony Financial and Empire Metals
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 6.49 times less return on investment than Empire Metals. But when comparing it to its historical volatility, Synchrony Financial is 2.18 times less risky than Empire Metals. It trades about 0.14 of its potential returns per unit of risk. Empire Metals Limited is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Empire Metals Limited on November 1, 2024 and sell it today you would earn a total of 245.00 from holding Empire Metals Limited or generate 35.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Synchrony Financial vs. Empire Metals Limited
Performance |
| Timeline |
| Synchrony Financial |
| Empire Metals Limited |
Synchrony Financial and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Empire Metals
The main advantage of trading using opposite Synchrony Financial and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Empire 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| Synchrony Financial vs. Empire Metals Limited | Synchrony Financial vs. Adriatic Metals | Synchrony Financial vs. URU Metals | Synchrony Financial vs. European Metals Holdings |
| Empire Metals vs. Givaudan SA | Empire Metals vs. Atalaya Mining | Empire Metals vs. Central Asia Metals | Empire Metals vs. Metals Exploration 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |