Correlation Between Synchrony Financial and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Liontrust Asset 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 Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Liontrust Asset Management, you can compare the effects of market volatilities on Synchrony Financial and Liontrust Asset 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Liontrust Asset.
Diversification Opportunities for Synchrony Financial and Liontrust Asset
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Synchrony and Liontrust is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Liontrust Asset go up and down completely randomly.
Pair Corralation between Synchrony Financial and Liontrust Asset
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.74 times more return on investment than Liontrust Asset. However, Synchrony Financial is 1.35 times less risky than Liontrust Asset. It trades about -0.11 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.11 per unit of risk. If you would invest 6,516 in Synchrony Financial on November 30, 2024 and sell it today you would lose (519.00) from holding Synchrony Financial or give up 7.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.18% |
| Values | Daily Returns |
Synchrony Financial vs. Liontrust Asset Management
Performance |
| Timeline |
| Synchrony Financial |
| Liontrust Asset Mana |
Synchrony Financial and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Liontrust Asset
The main advantage of trading using opposite Synchrony Financial and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| Synchrony Financial vs. Supermarket Income REIT | Synchrony Financial vs. First Class Metals | Synchrony Financial vs. Ross Stores | Synchrony Financial vs. Monster Beverage Corp |
| Liontrust Asset vs. MediaZest plc | Liontrust Asset vs. One Media iP | Liontrust Asset vs. National Beverage Corp | Liontrust Asset vs. Bell Food 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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