Correlation Between Mobilezone Holding and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Mobilezone Holding and Synchrony Financial 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 Mobilezone Holding and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mobilezone holding AG and Synchrony Financial, you can compare the effects of market volatilities on Mobilezone Holding and Synchrony Financial 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 Mobilezone Holding with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilezone Holding and Synchrony Financial.
Diversification Opportunities for Mobilezone Holding and Synchrony Financial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mobilezone and Synchrony is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding mobilezone holding AG and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Mobilezone Holding 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 mobilezone holding AG are associated (or correlated) with Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Mobilezone Holding i.e., Mobilezone Holding and Synchrony Financial go up and down completely randomly.
Pair Corralation between Mobilezone Holding and Synchrony Financial
Assuming the 90 days trading horizon mobilezone holding AG is expected to under-perform the Synchrony Financial. But the stock apears to be less risky and, when comparing its historical volatility, mobilezone holding AG is 1.31 times less risky than Synchrony Financial. The stock trades about -0.06 of its potential returns per unit of risk. The Synchrony Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,729 in Synchrony Financial on September 24, 2024 and sell it today you would earn a total of 2,856 from holding Synchrony Financial or generate 76.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.84% |
| Values | Daily Returns |
mobilezone holding AG vs. Synchrony Financial
Performance |
| Timeline |
| mobilezone holding |
| Synchrony Financial |
Mobilezone Holding and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobilezone Holding and Synchrony Financial
The main advantage of trading using opposite Mobilezone Holding and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobilezone Holding position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| Mobilezone Holding vs. Spotify Technology SA | Mobilezone Holding vs. Telecom Italia SpA | Mobilezone Holding vs. Scandinavian Tobacco Group | Mobilezone Holding vs. British American Tobacco |
| Synchrony Financial vs. Zegona Communications Plc | Synchrony Financial vs. United Airlines Holdings | Synchrony Financial vs. mobilezone holding AG | Synchrony Financial vs. STMicroelectronics NV |
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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