Correlation Between InPlay Oil and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Synovus 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 InPlay Oil and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Synovus Financial Corp, you can compare the effects of market volatilities on InPlay Oil and Synovus 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 InPlay Oil with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Synovus Financial.
Diversification Opportunities for InPlay Oil and Synovus Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between InPlay and Synovus is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Synovus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synovus Financial Corp and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with Synovus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synovus Financial Corp has no effect on the direction of InPlay Oil i.e., InPlay Oil and Synovus Financial go up and down completely randomly.
Pair Corralation between InPlay Oil and Synovus Financial
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Synovus Financial. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.31 times less risky than Synovus Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Synovus Financial Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,637 in Synovus Financial Corp on November 9, 2024 and sell it today you would earn a total of 1,813 from holding Synovus Financial Corp or generate 49.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Synovus Financial Corp
Performance |
| Timeline |
| InPlay Oil Corp |
| Synovus Financial Corp |
InPlay Oil and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Synovus Financial
The main advantage of trading using opposite InPlay Oil and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Synovus 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 Synovus Financial will offset losses from the drop in Synovus Financial's long position.| InPlay Oil vs. East Africa Metals | InPlay Oil vs. GALENA MINING LTD | InPlay Oil vs. MCEWEN MINING INC | InPlay Oil vs. SAN MIGUEL BREWERY |
| Synovus Financial vs. Cleanaway Waste Management | Synovus Financial vs. Mitsui Chemicals | Synovus Financial vs. Ultra Clean Holdings | Synovus Financial vs. Lamar Advertising |
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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