Correlation Between Synovus Financial and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Voya 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 Voya 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 Voya Financial, you can compare the effects of market volatilities on Synovus Financial and Voya 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 Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Voya Financial.
Diversification Opportunities for Synovus Financial and Voya Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synovus and Voya is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya 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 Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of Synovus Financial i.e., Synovus Financial and Voya Financial go up and down completely randomly.
Pair Corralation between Synovus Financial and Voya Financial
Assuming the 90 days trading horizon Synovus Financial is expected to generate 2.29 times less return on investment than Voya Financial. But when comparing it to its historical volatility, Synovus Financial Corp is 4.28 times less risky than Voya Financial. It trades about 0.13 of its potential returns per unit of risk. Voya Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,157 in Voya Financial on September 3, 2024 and sell it today you would earn a total of 1,143 from holding Voya Financial or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. Voya Financial
Performance |
| Timeline |
| Synovus Financial Corp |
| Voya Financial |
Synovus Financial and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Voya Financial
The main advantage of trading using opposite Synovus Financial and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Voya 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 Voya Financial will offset losses from the drop in Voya Financial'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 |
| Voya Financial vs. Lendingtree | Voya Financial vs. Voya Financial | Voya Financial vs. B Riley Financial | Voya Financial 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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