Correlation Between Blackstone and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Blackstone 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 Blackstone and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Synchrony Financial, you can compare the effects of market volatilities on Blackstone 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 Blackstone with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Synchrony Financial.
Diversification Opportunities for Blackstone and Synchrony Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackstone and Synchrony is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Blackstone 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 Blackstone Group 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 Blackstone i.e., Blackstone and Synchrony Financial go up and down completely randomly.
Pair Corralation between Blackstone and Synchrony Financial
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.39 times more return on investment than Synchrony Financial. However, Blackstone is 2.39 times more volatile than Synchrony Financial. It trades about 0.35 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.09 per unit of risk. If you would invest 16,606 in Blackstone Group on August 24, 2024 and sell it today you would earn a total of 1,897 from holding Blackstone Group or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackstone Group vs. Synchrony Financial
Performance |
| Timeline |
| Blackstone Group |
| Synchrony Financial |
Blackstone and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Synchrony Financial
The main advantage of trading using opposite Blackstone and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone 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.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Synchrony Financial vs. Synchrony Financial | Synchrony Financial vs. Enova International | Synchrony Financial vs. EZCORP Inc | Synchrony Financial vs. World Acceptance |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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