Correlation Between Citigroup and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Synovus Financial Corp, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Synovus Financial.
Diversification Opportunities for Citigroup and Synovus Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Synovus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Synovus Financial go up and down completely randomly.
Pair Corralation between Citigroup and Synovus Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.5 times less return on investment than Synovus Financial. But when comparing it to its historical volatility, Citigroup is 2.01 times less risky than Synovus Financial. It trades about 0.21 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,049 in Synovus Financial Corp on August 31, 2024 and sell it today you would earn a total of 696.00 from holding Synovus Financial Corp or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Synovus Financial Corp
Performance |
| Timeline |
| Citigroup |
| Synovus Financial Corp |
Citigroup and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Synovus Financial
The main advantage of trading using opposite Citigroup and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Synovus Financial vs. Huntington Bancshares Incorporated | Synovus Financial vs. Fifth Third Bancorp | Synovus Financial vs. MT Bank | Synovus Financial vs. Citizens Financial Group, |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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