Correlation Between Synchrony Financial and Seeing Machines
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Seeing Machines 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 Seeing Machines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Seeing Machines Limited, you can compare the effects of market volatilities on Synchrony Financial and Seeing Machines 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 Seeing Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Seeing Machines.
Diversification Opportunities for Synchrony Financial and Seeing Machines
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Synchrony and Seeing is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Seeing Machines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seeing Machines 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 Seeing Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seeing Machines has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Seeing Machines go up and down completely randomly.
Pair Corralation between Synchrony Financial and Seeing Machines
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.9 times more return on investment than Seeing Machines. However, Synchrony Financial is 1.11 times less risky than Seeing Machines. It trades about 0.16 of its potential returns per unit of risk. Seeing Machines Limited is currently generating about -0.07 per unit of risk. If you would invest 4,255 in Synchrony Financial on September 13, 2024 and sell it today you would earn a total of 2,543 from holding Synchrony Financial or generate 59.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.09% |
| Values | Daily Returns |
Synchrony Financial vs. Seeing Machines Limited
Performance |
| Timeline |
| Synchrony Financial |
| Seeing Machines |
Synchrony Financial and Seeing Machines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Seeing Machines
The main advantage of trading using opposite Synchrony Financial and Seeing Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Seeing Machines 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 Seeing Machines will offset losses from the drop in Seeing Machines' long position.| Synchrony Financial vs. Samsung Electronics Co | Synchrony Financial vs. Samsung Electronics Co | Synchrony Financial vs. Hyundai Motor | Synchrony Financial vs. Reliance Industries Ltd |
| Seeing Machines vs. Universal Display Corp | Seeing Machines vs. Take Two Interactive Software | Seeing Machines vs. Gear4music Plc | Seeing Machines vs. Blackrock World Mining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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