Correlation Between Synchrony Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Citizens 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 Synchrony Financial and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Citizens Financial Group,, you can compare the effects of market volatilities on Synchrony Financial and Citizens 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 Synchrony Financial with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Citizens Financial.
Diversification Opportunities for Synchrony Financial and Citizens Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synchrony and Citizens is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, and Synchrony Financial 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 Synchrony Financial are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between Synchrony Financial and Citizens Financial
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.99 times less return on investment than Citizens Financial. In addition to that, Synchrony Financial is 1.03 times more volatile than Citizens Financial Group,. It trades about 0.04 of its total potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.09 per unit of volatility. If you would invest 26,801 in Citizens Financial Group, on November 4, 2024 and sell it today you would earn a total of 834.00 from holding Citizens Financial Group, or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Synchrony Financial vs. Citizens Financial Group,
Performance |
| Timeline |
| Synchrony Financial |
| Citizens Financial Group, |
Synchrony Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Citizens Financial
The main advantage of trading using opposite Synchrony Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Synchrony Financial vs. Cardinal Health, | Synchrony Financial vs. NXP Semiconductors NV | Synchrony Financial vs. Teladoc Health | Synchrony Financial vs. Charter Communications |
| Citizens Financial vs. Global X Funds | Citizens Financial vs. T Mobile | Citizens Financial vs. Annaly Capital Management, | Citizens Financial vs. METISA Metalrgica Timboense |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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