Correlation Between INTERNET INJPADR and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both INTERNET INJPADR 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 INTERNET INJPADR and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERNET INJPADR 1 and Synchrony Financial, you can compare the effects of market volatilities on INTERNET INJPADR 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 INTERNET INJPADR with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNET INJPADR and Synchrony Financial.
Diversification Opportunities for INTERNET INJPADR and Synchrony Financial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between INTERNET and Synchrony is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding INTERNET INJPADR 1 and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and INTERNET INJPADR 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 INTERNET INJPADR 1 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 INTERNET INJPADR i.e., INTERNET INJPADR and Synchrony Financial go up and down completely randomly.
Pair Corralation between INTERNET INJPADR and Synchrony Financial
Assuming the 90 days horizon INTERNET INJPADR 1 is expected to under-perform the Synchrony Financial. But the stock apears to be less risky and, when comparing its historical volatility, INTERNET INJPADR 1 is 1.23 times less risky than Synchrony Financial. The stock trades about -0.08 of its potential returns per unit of risk. The Synchrony Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,298 in Synchrony Financial on November 4, 2024 and sell it today you would earn a total of 334.00 from holding Synchrony Financial or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERNET INJPADR 1 vs. Synchrony Financial
Performance |
| Timeline |
| INTERNET INJPADR 1 |
| Synchrony Financial |
INTERNET INJPADR and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERNET INJPADR and Synchrony Financial
The main advantage of trading using opposite INTERNET INJPADR and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNET INJPADR 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.| INTERNET INJPADR vs. FIREWEED METALS P | INTERNET INJPADR vs. Iridium Communications | INTERNET INJPADR vs. De Grey Mining | INTERNET INJPADR vs. Jacquet Metal Service |
| Synchrony Financial vs. SCANSOURCE | Synchrony Financial vs. Sixt Leasing SE | Synchrony Financial vs. MOVIE GAMES SA | Synchrony Financial vs. GigaMedia |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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