Correlation Between Synovus Financial and Lendingtree
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Lendingtree 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 Lendingtree 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 Lendingtree, you can compare the effects of market volatilities on Synovus Financial and Lendingtree 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 Lendingtree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Lendingtree.
Diversification Opportunities for Synovus Financial and Lendingtree
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synovus and Lendingtree is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree 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 Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of Synovus Financial i.e., Synovus Financial and Lendingtree go up and down completely randomly.
Pair Corralation between Synovus Financial and Lendingtree
Assuming the 90 days trading horizon Synovus Financial is expected to generate 3.23 times less return on investment than Lendingtree. But when comparing it to its historical volatility, Synovus Financial Corp is 14.76 times less risky than Lendingtree. It trades about 0.2 of its potential returns per unit of risk. Lendingtree is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,876 in Lendingtree on November 30, 2024 and sell it today you would earn a total of 163.00 from holding Lendingtree or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. Lendingtree
Performance |
| Timeline |
| Synovus Financial Corp |
| Lendingtree |
Synovus Financial and Lendingtree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Lendingtree
The main advantage of trading using opposite Synovus Financial and Lendingtree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Lendingtree 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 Lendingtree will offset losses from the drop in Lendingtree's long position.| Synovus Financial vs. MNB Holdings Corp | Synovus Financial vs. Harbor Bankshares | Synovus Financial vs. Oconee Financial | Synovus Financial vs. Mission Valley Bancorp |
| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree vs. B Riley 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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