Correlation Between INTER CARS and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Synchrony Financial, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Synchrony Financial.
Diversification Opportunities for INTER CARS and Synchrony Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTER and Synchrony is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and Synchrony Financial go up and down completely randomly.
Pair Corralation between INTER CARS and Synchrony Financial
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.1 times more return on investment than Synchrony Financial. However, INTER CARS is 1.1 times more volatile than Synchrony Financial. It trades about 0.31 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.06 per unit of risk. If you would invest 11,860 in INTER CARS SA on November 7, 2024 and sell it today you would earn a total of 1,480 from holding INTER CARS SA or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
INTER CARS SA vs. Synchrony Financial
Performance |
| Timeline |
| INTER CARS SA |
| Synchrony Financial |
INTER CARS and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Synchrony Financial
The main advantage of trading using opposite INTER CARS and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. Allegheny Technologies Incorporated | INTER CARS vs. HEALTHSTREAM | INTER CARS vs. WESANA HEALTH HOLD | INTER CARS vs. NIGHTINGALE HEALTH EO |
| Synchrony Financial vs. CAL MAINE FOODS | Synchrony Financial vs. MeVis Medical Solutions | Synchrony Financial vs. US FOODS HOLDING | Synchrony Financial vs. Peijia Medical Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |