Correlation Between Synchrony Financial and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Uber Technologies 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 Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Uber Technologies, you can compare the effects of market volatilities on Synchrony Financial and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Uber Technologies.
Diversification Opportunities for Synchrony Financial and Uber Technologies
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Synchrony and Uber is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Uber Technologies go up and down completely randomly.
Pair Corralation between Synchrony Financial and Uber Technologies
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.65 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Synchrony Financial is 1.2 times less risky than Uber Technologies. It trades about 0.1 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,621 in Uber Technologies on October 23, 2024 and sell it today you would earn a total of 519.00 from holding Uber Technologies or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Synchrony Financial vs. Uber Technologies
Performance |
| Timeline |
| Synchrony Financial |
| Uber Technologies |
Synchrony Financial and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Uber Technologies
The main advantage of trading using opposite Synchrony Financial and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| Synchrony Financial vs. Visa Inc | Synchrony Financial vs. American Express | Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. Discover Financial Services |
| Uber Technologies vs. STAG Industrial, | Uber Technologies vs. Jefferies Financial Group | Uber Technologies vs. Medical Properties Trust, | Uber Technologies vs. MAHLE Metal Leve |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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