Correlation Between DNB BANK and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both DNB BANK 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 DNB BANK and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DNB BANK ASA and Synovus Financial Corp, you can compare the effects of market volatilities on DNB BANK 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 DNB BANK with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DNB BANK and Synovus Financial.
Diversification Opportunities for DNB BANK and Synovus Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DNB and Synovus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding DNB BANK ASA 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 DNB BANK 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 DNB BANK ASA 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 DNB BANK i.e., DNB BANK and Synovus Financial go up and down completely randomly.
Pair Corralation between DNB BANK and Synovus Financial
Assuming the 90 days trading horizon DNB BANK ASA is expected to generate 21.04 times more return on investment than Synovus Financial. However, DNB BANK is 21.04 times more volatile than Synovus Financial Corp. It trades about 0.05 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.09 per unit of risk. If you would invest 1,824 in DNB BANK ASA on August 26, 2024 and sell it today you would earn a total of 134.00 from holding DNB BANK ASA or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DNB BANK ASA vs. Synovus Financial Corp
Performance |
| Timeline |
| DNB BANK ASA |
| Synovus Financial Corp |
DNB BANK and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DNB BANK and Synovus Financial
The main advantage of trading using opposite DNB BANK and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DNB BANK 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.| DNB BANK vs. Ming Le Sports | DNB BANK vs. Japan Medical Dynamic | DNB BANK vs. NTG Nordic Transport | DNB BANK vs. ANTA SPORTS PRODUCT |
| Synovus Financial vs. Superior Plus Corp | Synovus Financial vs. NMI Holdings | Synovus Financial vs. Origin Agritech | Synovus Financial vs. SIVERS SEMICONDUCTORS AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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