Correlation Between COMBA TELECOM and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Synchrony Financial, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Synchrony Financial.
Diversification Opportunities for COMBA TELECOM and Synchrony Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between COMBA and Synchrony is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Synchrony Financial go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Synchrony Financial
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Synchrony Financial. But the stock apears to be less risky and, when comparing its historical volatility, COMBA TELECOM SYST is 1.22 times less risky than Synchrony Financial. The stock trades about -0.22 of its potential returns per unit of risk. The Synchrony Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,362 in Synchrony Financial on November 1, 2024 and sell it today you would earn a total of 203.00 from holding Synchrony Financial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Synchrony Financial
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Synchrony Financial |
COMBA TELECOM and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Synchrony Financial
The main advantage of trading using opposite COMBA TELECOM and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.| COMBA TELECOM vs. China Datang | COMBA TELECOM vs. alstria office REIT AG | COMBA TELECOM vs. KENEDIX OFFICE INV | COMBA TELECOM vs. Cass Information Systems |
| Synchrony Financial vs. BRIT AMER TOBACCO | Synchrony Financial vs. SK TELECOM TDADR | Synchrony Financial vs. Singapore Telecommunications Limited | Synchrony Financial vs. COMBA TELECOM SYST |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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