Correlation Between Synchrony Financial and CN DATANG
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and CN DATANG 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 CN DATANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and CN DATANG C, you can compare the effects of market volatilities on Synchrony Financial and CN DATANG 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 CN DATANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and CN DATANG.
Diversification Opportunities for Synchrony Financial and CN DATANG
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synchrony and DT7 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and CN DATANG C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN DATANG C 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 CN DATANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN DATANG C has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and CN DATANG go up and down completely randomly.
Pair Corralation between Synchrony Financial and CN DATANG
Assuming the 90 days horizon Synchrony Financial is expected to generate 0.68 times more return on investment than CN DATANG. However, Synchrony Financial is 1.46 times less risky than CN DATANG. It trades about 0.18 of its potential returns per unit of risk. CN DATANG C is currently generating about -0.07 per unit of risk. If you would invest 6,281 in Synchrony Financial on October 28, 2024 and sell it today you would earn a total of 381.00 from holding Synchrony Financial or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. CN DATANG C
Performance |
| Timeline |
| Synchrony Financial |
| CN DATANG C |
Synchrony Financial and CN DATANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and CN DATANG
The main advantage of trading using opposite Synchrony Financial and CN DATANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, CN DATANG 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 CN DATANG will offset losses from the drop in CN DATANG's long position.| Synchrony Financial vs. Visa Inc | Synchrony Financial vs. Mastercard | Synchrony Financial vs. PayPal Holdings | Synchrony Financial vs. Discover Financial Services |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |