Correlation Between EPlay Digital and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both EPlay Digital 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 EPlay Digital and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ePlay Digital and Synchrony Financial, you can compare the effects of market volatilities on EPlay Digital 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 EPlay Digital with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlay Digital and Synchrony Financial.
Diversification Opportunities for EPlay Digital and Synchrony Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPlay and Synchrony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ePlay Digital and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and EPlay Digital 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 ePlay Digital 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 EPlay Digital i.e., EPlay Digital and Synchrony Financial go up and down completely randomly.
Pair Corralation between EPlay Digital and Synchrony Financial
Assuming the 90 days trading horizon ePlay Digital is expected to generate 32.84 times more return on investment than Synchrony Financial. However, EPlay Digital is 32.84 times more volatile than Synchrony Financial. It trades about 0.09 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.12 per unit of risk. If you would invest 0.10 in ePlay Digital on November 7, 2024 and sell it today you would earn a total of 0.00 from holding ePlay Digital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ePlay Digital vs. Synchrony Financial
Performance |
| Timeline |
| ePlay Digital |
| Synchrony Financial |
EPlay Digital and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPlay Digital and Synchrony Financial
The main advantage of trading using opposite EPlay Digital and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlay Digital 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.| EPlay Digital vs. Electronic Arts | EPlay Digital vs. Samsung Electronics Co | EPlay Digital vs. Richardson Electronics | EPlay Digital vs. ARROW ELECTRONICS |
| Synchrony Financial vs. Warner Music Group | Synchrony Financial vs. UNIVMUSIC GRPADR050 | Synchrony Financial vs. HK Electric Investments | Synchrony Financial vs. MidCap Financial Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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