Correlation Between Centaur Media and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Synchrony Financial, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Synchrony Financial.
Diversification Opportunities for Centaur Media and Synchrony Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centaur and Synchrony is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Synchrony Financial go up and down completely randomly.
Pair Corralation between Centaur Media and Synchrony Financial
Assuming the 90 days trading horizon Centaur Media is expected to generate 75.38 times less return on investment than Synchrony Financial. But when comparing it to its historical volatility, Centaur Media is 2.82 times less risky than Synchrony Financial. It trades about 0.01 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,652 in Synchrony Financial on August 28, 2024 and sell it today you would earn a total of 1,107 from holding Synchrony Financial or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. Synchrony Financial
Performance |
| Timeline |
| Centaur Media |
| Synchrony Financial |
Centaur Media and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Synchrony Financial
The main advantage of trading using opposite Centaur Media and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. SupplyMe Capital PLC | Centaur Media vs. SM Energy Co | Centaur Media vs. FuelCell Energy | Centaur Media vs. Grand Vision Media |
| Synchrony Financial vs. Samsung Electronics Co | Synchrony Financial vs. Samsung Electronics Co | Synchrony Financial vs. Hyundai Motor | Synchrony Financial vs. Toyota Motor Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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