Correlation Between Laureate Education and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both Laureate Education 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 Laureate Education and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and Synovus Financial Corp, you can compare the effects of market volatilities on Laureate Education 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 Laureate Education with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and Synovus Financial.
Diversification Opportunities for Laureate Education and Synovus Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Laureate and Synovus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education 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 Laureate Education 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 Laureate Education 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 Laureate Education i.e., Laureate Education and Synovus Financial go up and down completely randomly.
Pair Corralation between Laureate Education and Synovus Financial
Assuming the 90 days trading horizon Laureate Education is expected to generate 1.06 times less return on investment than Synovus Financial. In addition to that, Laureate Education is 1.01 times more volatile than Synovus Financial Corp. It trades about 0.09 of its total potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.1 per unit of volatility. If you would invest 3,404 in Synovus Financial Corp on October 20, 2024 and sell it today you would earn a total of 1,846 from holding Synovus Financial Corp or generate 54.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. Synovus Financial Corp
Performance |
| Timeline |
| Laureate Education |
| Synovus Financial Corp |
Laureate Education and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and Synovus Financial
The main advantage of trading using opposite Laureate Education and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education 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.| Laureate Education vs. Synovus Financial Corp | Laureate Education vs. BE Semiconductor Industries | Laureate Education vs. Synchrony Financial | Laureate Education vs. Magnachip Semiconductor |
| Synovus Financial vs. PLAYTIKA HOLDING DL 01 | Synovus Financial vs. IMAGIN MEDICAL INC | Synovus Financial vs. Merit Medical Systems | Synovus Financial vs. ONWARD MEDICAL BV |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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