Correlation Between Adriatic Metals and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals and Synchrony Financial, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Synchrony Financial.
Diversification Opportunities for Adriatic Metals and Synchrony Financial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adriatic and Synchrony is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals i.e., Adriatic Metals and Synchrony Financial go up and down completely randomly.
Pair Corralation between Adriatic Metals and Synchrony Financial
Assuming the 90 days trading horizon Adriatic Metals is expected to generate 2.05 times less return on investment than Synchrony Financial. In addition to that, Adriatic Metals is 1.22 times more volatile than Synchrony Financial. It trades about 0.05 of its total potential returns per unit of risk. Synchrony Financial is currently generating about 0.11 per unit of volatility. If you would invest 3,892 in Synchrony Financial on November 8, 2024 and sell it today you would earn a total of 2,870 from holding Synchrony Financial or generate 73.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.81% |
| Values | Daily Returns |
Adriatic Metals vs. Synchrony Financial
Performance |
| Timeline |
| Adriatic Metals |
| Synchrony Financial |
Adriatic Metals and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Synchrony Financial
The main advantage of trading using opposite Adriatic Metals and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.| Adriatic Metals vs. Wheaton Precious Metals | Adriatic Metals vs. Extra Space Storage | Adriatic Metals vs. Public Storage | Adriatic Metals vs. URU Metals |
| Synchrony Financial vs. Software Circle plc | Synchrony Financial vs. Creo Medical Group | Synchrony Financial vs. Ondine Biomedical | Synchrony Financial vs. Sartorius Stedim Biotech |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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