Correlation Between NYSE Composite and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Synovus Financial Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Synovus Financial.
Diversification Opportunities for NYSE Composite and Synovus Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Synovus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Synovus Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Synovus Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.57 times more return on investment than Synovus Financial. However, NYSE Composite is 1.75 times less risky than Synovus Financial. It trades about 0.08 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.04 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Synovus Financial Corp
Performance |
| Timeline |
NYSE Composite and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Synovus Financial Corp
Pair trading matchups for Synovus Financial
Pair Trading with NYSE Composite and Synovus Financial
The main advantage of trading using opposite NYSE Composite and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Synovus Financial vs. Capital One Financial | Synovus Financial vs. Capital One Financial | Synovus Financial vs. Bank of America | Synovus Financial vs. KeyCorp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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