Correlation Between DAX Index and Synchrony Financial
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By analyzing existing cross correlation between DAX Index and Synchrony Financial, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Synchrony Financial.
Diversification Opportunities for DAX Index and Synchrony Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Synchrony is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Synchrony Financial go up and down completely randomly.
Pair Corralation between DAX Index and Synchrony Financial
Assuming the 90 days trading horizon DAX Index is expected to generate 0.38 times more return on investment than Synchrony Financial. However, DAX Index is 2.66 times less risky than Synchrony Financial. It trades about -0.03 of its potential returns per unit of risk. Synchrony Financial is currently generating about -0.03 per unit of risk. If you would invest 2,039,916 in DAX Index on October 12, 2024 and sell it today you would lose (8,206) from holding DAX Index or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Synchrony Financial
Performance |
| Timeline |
DAX Index and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Synchrony Financial
Pair trading matchups for Synchrony Financial
Pair Trading with DAX Index and Synchrony Financial
The main advantage of trading using opposite DAX Index and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Scottish Mortgage Investment | DAX Index vs. Keck Seng Investments | DAX Index vs. Lendlease Group | DAX Index vs. FIRST SAVINGS FINL |
| Synchrony Financial vs. CPU SOFTWAREHOUSE | Synchrony Financial vs. GBS Software AG | Synchrony Financial vs. Alfa Financial Software | Synchrony Financial vs. Kingdee International Software |
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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