Correlation Between PT Bank and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and Synchrony Financial, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Synchrony Financial.
Diversification Opportunities for PT Bank and Synchrony Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PQ9 and Synchrony is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and PT Bank 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 PT Bank Mandiri 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 PT Bank i.e., PT Bank and Synchrony Financial go up and down completely randomly.
Pair Corralation between PT Bank and Synchrony Financial
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 3.42 times more return on investment than Synchrony Financial. However, PT Bank is 3.42 times more volatile than Synchrony Financial. It trades about 0.09 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.24 per unit of risk. If you would invest 32.00 in PT Bank Mandiri on October 25, 2024 and sell it today you would earn a total of 2.00 from holding PT Bank Mandiri or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. Synchrony Financial
Performance |
| Timeline |
| PT Bank Mandiri |
| Synchrony Financial |
PT Bank and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Synchrony Financial
The main advantage of trading using opposite PT Bank and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. CARSALESCOM | PT Bank vs. Salesforce | PT Bank vs. GRENKELEASING Dusseldorf | PT Bank vs. Global Ship Lease |
| Synchrony Financial vs. SEALED AIR | Synchrony Financial vs. SOFI TECHNOLOGIES | Synchrony Financial vs. G III Apparel Group | Synchrony Financial vs. Easy Software AG |
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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