Correlation Between Synchrony Financial and Natural Health
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Natural Health 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 Natural Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Natural Health Trends, you can compare the effects of market volatilities on Synchrony Financial and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Natural Health.
Diversification Opportunities for Synchrony Financial and Natural Health
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Natural is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Natural Health go up and down completely randomly.
Pair Corralation between Synchrony Financial and Natural Health
Assuming the 90 days horizon Synchrony Financial is expected to generate 0.75 times more return on investment than Natural Health. However, Synchrony Financial is 1.33 times less risky than Natural Health. It trades about 0.07 of its potential returns per unit of risk. Natural Health Trends is currently generating about 0.04 per unit of risk. If you would invest 3,173 in Synchrony Financial on October 16, 2024 and sell it today you would earn a total of 2,998 from holding Synchrony Financial or generate 94.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Synchrony Financial vs. Natural Health Trends
Performance |
| Timeline |
| Synchrony Financial |
| Natural Health Trends |
Synchrony Financial and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Natural Health
The main advantage of trading using opposite Synchrony Financial and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| Synchrony Financial vs. RETAIL FOOD GROUP | Synchrony Financial vs. ALTAIR RES INC | Synchrony Financial vs. Ryanair Holdings plc | Synchrony Financial vs. DELTA AIR LINES |
| Natural Health vs. Micron Technology | Natural Health vs. REVO INSURANCE SPA | Natural Health vs. Take Two Interactive Software | Natural Health vs. Synchrony 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 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.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |