Correlation Between Synchrony Financial and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and ONWARD MEDICAL 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 ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and ONWARD MEDICAL BV, you can compare the effects of market volatilities on Synchrony Financial and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and ONWARD MEDICAL.
Diversification Opportunities for Synchrony Financial and ONWARD MEDICAL
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and ONWARD is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Synchrony Financial and ONWARD MEDICAL
Assuming the 90 days horizon Synchrony Financial is expected to generate 13.34 times less return on investment than ONWARD MEDICAL. But when comparing it to its historical volatility, Synchrony Financial is 2.67 times less risky than ONWARD MEDICAL. It trades about 0.06 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 458.00 in ONWARD MEDICAL BV on October 17, 2024 and sell it today you would earn a total of 158.00 from holding ONWARD MEDICAL BV or generate 34.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| Synchrony Financial |
| ONWARD MEDICAL BV |
Synchrony Financial and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and ONWARD MEDICAL
The main advantage of trading using opposite Synchrony Financial and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| Synchrony Financial vs. Visa Inc | Synchrony Financial vs. Visa Inc | Synchrony Financial vs. Mastercard | Synchrony Financial vs. Mastercard |
| ONWARD MEDICAL vs. Synchrony Financial | ONWARD MEDICAL vs. Erste Group Bank | ONWARD MEDICAL vs. Kingdee International Software | ONWARD MEDICAL vs. COREBRIDGE FINANCIAL INC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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