Correlation Between Dow Jones and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Synovus Financial Corp, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Synovus Financial.
Diversification Opportunities for Dow Jones and Synovus Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Synovus is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Synovus Financial go up and down completely randomly.
Pair Corralation between Dow Jones and Synovus Financial
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.42 times less return on investment than Synovus Financial. But when comparing it to its historical volatility, Dow Jones Industrial is 4.3 times less risky than Synovus Financial. It trades about 0.29 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Synovus Financial Corp
Performance |
| Timeline |
Dow Jones and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Synovus Financial Corp
Pair trading matchups for Synovus Financial
Pair Trading with Dow Jones and Synovus Financial
The main advantage of trading using opposite Dow Jones and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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