Correlation Between Synchrony Financial and SILICON LABORATOR
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and SILICON LABORATOR 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 SILICON LABORATOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and SILICON LABORATOR, you can compare the effects of market volatilities on Synchrony Financial and SILICON LABORATOR 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 SILICON LABORATOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and SILICON LABORATOR.
Diversification Opportunities for Synchrony Financial and SILICON LABORATOR
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synchrony and SILICON is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and SILICON LABORATOR go up and down completely randomly.
Pair Corralation between Synchrony Financial and SILICON LABORATOR
Assuming the 90 days horizon Synchrony Financial is expected to generate 0.92 times more return on investment than SILICON LABORATOR. However, Synchrony Financial is 1.09 times less risky than SILICON LABORATOR. It trades about 0.2 of its potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.11 per unit of risk. If you would invest 4,891 in Synchrony Financial on October 14, 2024 and sell it today you would earn a total of 1,511 from holding Synchrony Financial or generate 30.89% 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. SILICON LABORATOR
Performance |
| Timeline |
| Synchrony Financial |
| SILICON LABORATOR |
Synchrony Financial and SILICON LABORATOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and SILICON LABORATOR
The main advantage of trading using opposite Synchrony Financial and SILICON LABORATOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, SILICON LABORATOR 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 SILICON LABORATOR will offset losses from the drop in SILICON LABORATOR's long position.| Synchrony Financial vs. COMMERCIAL VEHICLE | Synchrony Financial vs. PRECISION DRILLING P | Synchrony Financial vs. CARSALESCOM | Synchrony Financial vs. United Utilities Group |
| SILICON LABORATOR vs. Synchrony Financial | SILICON LABORATOR vs. The Hanover Insurance | SILICON LABORATOR vs. COSMOSTEEL HLDGS | SILICON LABORATOR vs. Sun Life Financial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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