Correlation Between RenaissanceRe Holdings and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both RenaissanceRe Holdings 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 RenaissanceRe Holdings and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RenaissanceRe Holdings and Synovus Financial Corp, you can compare the effects of market volatilities on RenaissanceRe Holdings 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 RenaissanceRe Holdings with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of RenaissanceRe Holdings and Synovus Financial.
Diversification Opportunities for RenaissanceRe Holdings and Synovus Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between RenaissanceRe and Synovus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding RenaissanceRe Holdings 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 RenaissanceRe 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 RenaissanceRe Holdings 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 RenaissanceRe Holdings i.e., RenaissanceRe Holdings and Synovus Financial go up and down completely randomly.
Pair Corralation between RenaissanceRe Holdings and Synovus Financial
Assuming the 90 days trading horizon RenaissanceRe Holdings is expected to generate 1.45 times more return on investment than Synovus Financial. However, RenaissanceRe Holdings is 1.45 times more volatile than Synovus Financial Corp. It trades about 0.11 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.13 per unit of risk. If you would invest 2,244 in RenaissanceRe Holdings on September 3, 2024 and sell it today you would earn a total of 199.00 from holding RenaissanceRe Holdings or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RenaissanceRe Holdings vs. Synovus Financial Corp
Performance |
| Timeline |
| RenaissanceRe Holdings |
| Synovus Financial Corp |
RenaissanceRe Holdings and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RenaissanceRe Holdings and Synovus Financial
The main advantage of trading using opposite RenaissanceRe Holdings and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RenaissanceRe Holdings 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.| RenaissanceRe Holdings vs. SiriusPoint | RenaissanceRe Holdings vs. Greenlight Capital Re | RenaissanceRe Holdings vs. Maiden Holdings | RenaissanceRe Holdings vs. Renaissancere Holdings |
| Synovus Financial vs. MNB Holdings Corp | Synovus Financial vs. Harbor Bankshares | Synovus Financial vs. Oconee Financial | Synovus Financial vs. Mission Valley Bancorp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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