Correlation Between Synovus Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Citizens Financial 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 Synovus Financial and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synovus Financial Corp and Citizens Financial Group, you can compare the effects of market volatilities on Synovus Financial and Citizens Financial 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 Synovus Financial with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Citizens Financial.
Diversification Opportunities for Synovus Financial and Citizens Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synovus and Citizens is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and Synovus 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 Synovus Financial Corp are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial has no effect on the direction of Synovus Financial i.e., Synovus Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between Synovus Financial and Citizens Financial
Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 0.26 times more return on investment than Citizens Financial. However, Synovus Financial Corp is 3.9 times less risky than Citizens Financial. It trades about 0.28 of its potential returns per unit of risk. Citizens Financial Group is currently generating about 0.01 per unit of risk. If you would invest 2,522 in Synovus Financial Corp on September 1, 2024 and sell it today you would earn a total of 52.00 from holding Synovus Financial Corp or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Synovus Financial Corp vs. Citizens Financial Group
Performance |
| Timeline |
| Synovus Financial Corp |
| Citizens Financial |
Synovus Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Citizens Financial
The main advantage of trading using opposite Synovus Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Citizens Financial 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Synovus Financial vs. KeyCorp | Synovus Financial vs. KeyCorp | Synovus Financial vs. Fifth Third Bancorp | Synovus Financial vs. Citizens Financial Group |
| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America | Citizens Financial vs. KeyCorp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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