Correlation Between Synchrony Financial and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Medical Properties 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 Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Medical Properties Trust,, you can compare the effects of market volatilities on Synchrony Financial and Medical Properties 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 Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Medical Properties.
Diversification Opportunities for Synchrony Financial and Medical Properties
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synchrony and Medical is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Medical Properties Trust, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust, 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 Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust, has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Medical Properties go up and down completely randomly.
Pair Corralation between Synchrony Financial and Medical Properties
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 2.92 times less return on investment than Medical Properties. But when comparing it to its historical volatility, Synchrony Financial is 1.72 times less risky than Medical Properties. It trades about 0.05 of its potential returns per unit of risk. Medical Properties Trust, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,209 in Medical Properties Trust, on November 1, 2024 and sell it today you would earn a total of 53.00 from holding Medical Properties Trust, or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Synchrony Financial vs. Medical Properties Trust,
Performance |
| Timeline |
| Synchrony Financial |
| Medical Properties Trust, |
Synchrony Financial and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Medical Properties
The main advantage of trading using opposite Synchrony Financial and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| Synchrony Financial vs. ON Semiconductor | Synchrony Financial vs. Patria Investments Limited | Synchrony Financial vs. Globus Medical, | Synchrony Financial vs. Caesars Entertainment, |
| Medical Properties vs. Credit Acceptance | Medical Properties vs. Discover Financial Services | Medical Properties vs. Synchrony Financial | Medical Properties vs. Lloyds Banking Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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