Correlation Between Orix Corp and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Orix Corp 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 Orix Corp and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orix Corp Ads and Synchrony Financial, you can compare the effects of market volatilities on Orix Corp 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 Orix Corp with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orix Corp and Synchrony Financial.
Diversification Opportunities for Orix Corp and Synchrony Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orix and Synchrony is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Orix Corp 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 Orix Corp Ads 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 Orix Corp i.e., Orix Corp and Synchrony Financial go up and down completely randomly.
Pair Corralation between Orix Corp and Synchrony Financial
Allowing for the 90-day total investment horizon Orix Corp Ads is expected to generate 0.8 times more return on investment than Synchrony Financial. However, Orix Corp Ads is 1.25 times less risky than Synchrony Financial. It trades about -0.07 of its potential returns per unit of risk. Synchrony Financial is currently generating about -0.34 per unit of risk. If you would invest 10,601 in Orix Corp Ads on November 28, 2024 and sell it today you would lose (297.00) from holding Orix Corp Ads or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orix Corp Ads vs. Synchrony Financial
Performance |
| Timeline |
| Orix Corp Ads |
| Synchrony Financial |
Orix Corp and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orix Corp and Synchrony Financial
The main advantage of trading using opposite Orix Corp and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp 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.| Orix Corp vs. Federal Agricultural Mortgage | Orix Corp vs. Atlanticus Holdings Corp | Orix Corp vs. Nelnet Inc | Orix Corp vs. EZCORP Inc |
| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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