Correlation Between Synchrony Financial and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Mr Cooper 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 Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Mr Cooper Group, you can compare the effects of market volatilities on Synchrony Financial and Mr Cooper 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 Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Mr Cooper.
Diversification Opportunities for Synchrony Financial and Mr Cooper
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synchrony and COOP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group 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 Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Mr Cooper go up and down completely randomly.
Pair Corralation between Synchrony Financial and Mr Cooper
Considering the 90-day investment horizon Synchrony Financial is expected to generate 2.37 times more return on investment than Mr Cooper. However, Synchrony Financial is 2.37 times more volatile than Mr Cooper Group. It trades about 0.19 of its potential returns per unit of risk. Mr Cooper Group is currently generating about 0.29 per unit of risk. If you would invest 5,475 in Synchrony Financial on August 24, 2024 and sell it today you would earn a total of 965.00 from holding Synchrony Financial or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Synchrony Financial vs. Mr Cooper Group
Performance |
| Timeline |
| Synchrony Financial |
| Mr Cooper Group |
Synchrony Financial and Mr Cooper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Mr Cooper
The main advantage of trading using opposite Synchrony Financial and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
| Mr Cooper vs. Guild Holdings Co | Mr Cooper vs. Encore Capital Group | Mr Cooper vs. CNFinance Holdings | Mr Cooper vs. Velocity Financial Llc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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