Correlation Between Lexinfintech Holdings and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings 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 Lexinfintech Holdings and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Synchrony Financial, you can compare the effects of market volatilities on Lexinfintech Holdings 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 Lexinfintech Holdings with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Synchrony Financial.
Diversification Opportunities for Lexinfintech Holdings and Synchrony Financial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lexinfintech and Synchrony is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Lexinfintech Holdings 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 Lexinfintech Holdings 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 Lexinfintech Holdings i.e., Lexinfintech Holdings and Synchrony Financial go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Synchrony Financial
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 4.07 times more return on investment than Synchrony Financial. However, Lexinfintech Holdings is 4.07 times more volatile than Synchrony Financial. It trades about 0.05 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.05 per unit of risk. If you would invest 320.00 in Lexinfintech Holdings on August 24, 2024 and sell it today you would earn a total of 10.00 from holding Lexinfintech Holdings or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Synchrony Financial
Performance |
| Timeline |
| Lexinfintech Holdings |
| Synchrony Financial |
Lexinfintech Holdings and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Synchrony Financial
The main advantage of trading using opposite Lexinfintech Holdings and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings 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.| Lexinfintech Holdings vs. Visa Class A | Lexinfintech Holdings vs. Mastercard | Lexinfintech Holdings vs. SoFi Technologies | Lexinfintech Holdings vs. Coca Cola Consolidated |
| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. Citizens Financial Group | Synchrony Financial vs. Wells Fargo |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |