Correlation Between Synchrony Financial and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Mitsubishi UFJ 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 Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on Synchrony Financial and Mitsubishi UFJ 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 Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Mitsubishi UFJ.
Diversification Opportunities for Synchrony Financial and Mitsubishi UFJ
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synchrony and Mitsubishi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Mitsubishi UFJ Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Lease 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 Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Lease has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Synchrony Financial and Mitsubishi UFJ
Considering the 90-day investment horizon Synchrony Financial is expected to generate 0.94 times more return on investment than Mitsubishi UFJ. However, Synchrony Financial is 1.07 times less risky than Mitsubishi UFJ. It trades about 0.2 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about -0.14 per unit of risk. If you would invest 5,653 in Synchrony Financial on August 29, 2024 and sell it today you would earn a total of 1,073 from holding Synchrony Financial or generate 18.98% 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. Mitsubishi UFJ Lease
Performance |
| Timeline |
| Synchrony Financial |
| Mitsubishi UFJ Lease |
Synchrony Financial and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Mitsubishi UFJ
The main advantage of trading using opposite Synchrony Financial and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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