Correlation Between Synchrony Financial and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Orix Corp 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 Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Orix Corp Ads, you can compare the effects of market volatilities on Synchrony Financial and Orix Corp 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 Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Orix Corp.
Diversification Opportunities for Synchrony Financial and Orix Corp
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Synchrony and Orix is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Orix Corp go up and down completely randomly.
Pair Corralation between Synchrony Financial and Orix Corp
Considering the 90-day investment horizon Synchrony Financial is expected to generate 1.46 times more return on investment than Orix Corp. However, Synchrony Financial is 1.46 times more volatile than Orix Corp Ads. It trades about 0.15 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.0 per unit of risk. If you would invest 4,312 in Synchrony Financial on August 30, 2024 and sell it today you would earn a total of 2,410 from holding Synchrony Financial or generate 55.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. Orix Corp Ads
Performance |
| Timeline |
| Synchrony Financial |
| Orix Corp Ads |
Synchrony Financial and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Orix Corp
The main advantage of trading using opposite Synchrony Financial and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
| Orix Corp vs. Atlanticus Holdings Corp | Orix Corp vs. Nelnet Inc | Orix Corp vs. EZCORP Inc | Orix Corp vs. SLM Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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