Correlation Between Synchrony Financial and Tungsten West
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Tungsten West 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 Tungsten West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Tungsten West PLC, you can compare the effects of market volatilities on Synchrony Financial and Tungsten West 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 Tungsten West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Tungsten West.
Diversification Opportunities for Synchrony Financial and Tungsten West
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synchrony and Tungsten is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Tungsten West PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tungsten West 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 Tungsten West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tungsten West PLC has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Tungsten West go up and down completely randomly.
Pair Corralation between Synchrony Financial and Tungsten West
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.33 times less return on investment than Tungsten West. But when comparing it to its historical volatility, Synchrony Financial is 4.14 times less risky than Tungsten West. It trades about 0.11 of its potential returns per unit of risk. Tungsten West PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Tungsten West PLC on September 2, 2024 and sell it today you would lose (50.00) from holding Tungsten West PLC or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.82% |
| Values | Daily Returns |
Synchrony Financial vs. Tungsten West PLC
Performance |
| Timeline |
| Synchrony Financial |
| Tungsten West PLC |
Synchrony Financial and Tungsten West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Tungsten West
The main advantage of trading using opposite Synchrony Financial and Tungsten West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Tungsten West 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 Tungsten West will offset losses from the drop in Tungsten West's long position.| Synchrony Financial vs. Uniper SE | Synchrony Financial vs. Mulberry Group PLC | Synchrony Financial vs. London Security Plc | Synchrony Financial vs. Triad Group PLC |
| Tungsten West vs. Verizon Communications | Tungsten West vs. Fortune Brands Home | Tungsten West vs. Infrastrutture Wireless Italiane | Tungsten West vs. Home Depot |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |