Correlation Between Synchrony Financial and Shell Plc
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Shell Plc 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 Shell Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Shell plc, you can compare the effects of market volatilities on Synchrony Financial and Shell Plc 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 Shell Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Shell Plc.
Diversification Opportunities for Synchrony Financial and Shell Plc
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Synchrony and Shell is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Shell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell plc 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 Shell Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell plc has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Shell Plc go up and down completely randomly.
Pair Corralation between Synchrony Financial and Shell Plc
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.91 times more return on investment than Shell Plc. However, Synchrony Financial is 1.91 times more volatile than Shell plc. It trades about 0.13 of its potential returns per unit of risk. Shell plc is currently generating about 0.01 per unit of risk. If you would invest 3,098 in Synchrony Financial on September 3, 2024 and sell it today you would earn a total of 3,623 from holding Synchrony Financial or generate 116.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.12% |
| Values | Daily Returns |
Synchrony Financial vs. Shell plc
Performance |
| Timeline |
| Synchrony Financial |
| Shell plc |
Synchrony Financial and Shell Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Shell Plc
The main advantage of trading using opposite Synchrony Financial and Shell Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Shell Plc 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 Shell Plc will offset losses from the drop in Shell Plc's long position.| Synchrony Financial vs. Endeavour Mining Corp | Synchrony Financial vs. Silvercorp Metals | Synchrony Financial vs. GreenX Metals | Synchrony Financial vs. bet at home AG |
| Shell Plc vs. Flowtech Fluidpower plc | Shell Plc vs. Fidelity National Information | Shell Plc vs. Gaztransport et Technigaz | Shell Plc vs. Teradata Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |