Correlation Between Virtu Financial and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Virtu Financial 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 Virtu Financial and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Synchrony Financial, you can compare the effects of market volatilities on Virtu Financial 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 Virtu Financial with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Synchrony Financial.
Diversification Opportunities for Virtu Financial and Synchrony Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtu and Synchrony is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Virtu 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 Virtu Financial 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 Virtu Financial i.e., Virtu Financial and Synchrony Financial go up and down completely randomly.
Pair Corralation between Virtu Financial and Synchrony Financial
Assuming the 90 days horizon Virtu Financial is expected to generate 1.02 times more return on investment than Synchrony Financial. However, Virtu Financial is 1.02 times more volatile than Synchrony Financial. It trades about 0.16 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.15 per unit of risk. If you would invest 2,127 in Virtu Financial on October 13, 2024 and sell it today you would earn a total of 1,433 from holding Virtu Financial or generate 67.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Synchrony Financial
Performance |
| Timeline |
| Virtu Financial |
| Synchrony Financial |
Virtu Financial and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Synchrony Financial
The main advantage of trading using opposite Virtu Financial and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial 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.| Virtu Financial vs. Compagnie Plastic Omnium | Virtu Financial vs. Corporate Office Properties | Virtu Financial vs. APPLIED MATERIALS | Virtu Financial vs. THRACE PLASTICS |
| Synchrony Financial vs. Tyson Foods | Synchrony Financial vs. GWILLI FOOD | Synchrony Financial vs. CVR Medical Corp | Synchrony Financial vs. Diamyd Medical AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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