Correlation Between Synchrony Financial and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Phibro Animal 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 Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Phibro Animal Health, you can compare the effects of market volatilities on Synchrony Financial and Phibro Animal 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 Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Phibro Animal.
Diversification Opportunities for Synchrony Financial and Phibro Animal
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synchrony and Phibro is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health 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 Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Phibro Animal go up and down completely randomly.
Pair Corralation between Synchrony Financial and Phibro Animal
Assuming the 90 days horizon Synchrony Financial is expected to generate 0.77 times more return on investment than Phibro Animal. However, Synchrony Financial is 1.29 times less risky than Phibro Animal. It trades about 0.07 of its potential returns per unit of risk. Phibro Animal Health is currently generating about -0.08 per unit of risk. If you would invest 6,366 in Synchrony Financial on October 30, 2024 and sell it today you would earn a total of 266.00 from holding Synchrony Financial or generate 4.18% 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. Phibro Animal Health
Performance |
| Timeline |
| Synchrony Financial |
| Phibro Animal Health |
Synchrony Financial and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Phibro Animal
The main advantage of trading using opposite Synchrony Financial and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Phibro Animal 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| Synchrony Financial vs. SIERRA METALS | Synchrony Financial vs. The Boston Beer | Synchrony Financial vs. Suntory Beverage Food | Synchrony Financial vs. SAN MIGUEL BREWERY |
| Phibro Animal vs. QINGCI GAMES INC | Phibro Animal vs. PENN NATL GAMING | Phibro Animal vs. ON SEMICONDUCTOR | Phibro Animal vs. Nordic Semiconductor ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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