Correlation Between National Bank and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Synchrony Financial, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Synchrony Financial.
Diversification Opportunities for National Bank and Synchrony Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Synchrony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and National Bank 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 National Bank of 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 National Bank i.e., National Bank and Synchrony Financial go up and down completely randomly.
Pair Corralation between National Bank and Synchrony Financial
If you would invest 4,936 in Synchrony Financial on September 3, 2024 and sell it today you would earn a total of 1,816 from holding Synchrony Financial or generate 36.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
National Bank of vs. Synchrony Financial
Performance |
| Timeline |
| National Bank |
| Synchrony Financial |
National Bank and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Synchrony Financial
The main advantage of trading using opposite National Bank and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Qurate Retail Series | National Bank vs. GreenX Metals | National Bank vs. CNH Industrial NV | National Bank vs. Wheaton Precious Metals |
| Synchrony Financial vs. Endeavour Mining Corp | Synchrony Financial vs. Silvercorp Metals | Synchrony Financial vs. GreenX Metals | Synchrony Financial vs. bet at home AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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