Correlation Between Synovus Financial and B Riley
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and B Riley 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 B Riley 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 B Riley Financial, you can compare the effects of market volatilities on Synovus Financial and B Riley 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 B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and B Riley.
Diversification Opportunities for Synovus Financial and B Riley
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synovus and RILY is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and B Riley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Riley 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 B Riley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Riley Financial has no effect on the direction of Synovus Financial i.e., Synovus Financial and B Riley go up and down completely randomly.
Pair Corralation between Synovus Financial and B Riley
Assuming the 90 days trading horizon Synovus Financial is expected to generate 1.24 times less return on investment than B Riley. But when comparing it to its historical volatility, Synovus Financial Corp is 16.6 times less risky than B Riley. It trades about 0.28 of its potential returns per unit of risk. B Riley Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 590.00 in B Riley Financial on September 1, 2024 and sell it today you would lose (4.00) from holding B Riley Financial or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Synovus Financial Corp vs. B Riley Financial
Performance |
| Timeline |
| Synovus Financial Corp |
| B Riley Financial |
Synovus Financial and B Riley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and B Riley
The main advantage of trading using opposite Synovus Financial and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, B Riley 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 B Riley will offset losses from the drop in B Riley's long position.| Synovus Financial vs. KeyCorp | Synovus Financial vs. KeyCorp | Synovus Financial vs. Fifth Third Bancorp | Synovus Financial vs. Citizens Financial Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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