Correlation Between Synchrony Financial and Putnam Municipal
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Putnam Municipal 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 Putnam Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Putnam Municipal Opportunities, you can compare the effects of market volatilities on Synchrony Financial and Putnam Municipal 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 Putnam Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Putnam Municipal.
Diversification Opportunities for Synchrony Financial and Putnam Municipal
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synchrony and Putnam is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Putnam Municipal Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Municipal Opp 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 Putnam Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Municipal Opp has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Putnam Municipal go up and down completely randomly.
Pair Corralation between Synchrony Financial and Putnam Municipal
Considering the 90-day investment horizon Synchrony Financial is expected to generate 3.81 times more return on investment than Putnam Municipal. However, Synchrony Financial is 3.81 times more volatile than Putnam Municipal Opportunities. It trades about 0.21 of its potential returns per unit of risk. Putnam Municipal Opportunities is currently generating about 0.02 per unit of risk. If you would invest 4,620 in Synchrony Financial on September 12, 2024 and sell it today you would earn a total of 2,067 from holding Synchrony Financial or generate 44.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. Putnam Municipal Opportunities
Performance |
| Timeline |
| Synchrony Financial |
| Putnam Municipal Opp |
Synchrony Financial and Putnam Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Putnam Municipal
The main advantage of trading using opposite Synchrony Financial and Putnam Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Putnam Municipal 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 Putnam Municipal will offset losses from the drop in Putnam Municipal's long position.| Synchrony Financial vs. Victory Integrity Smallmid Cap | Synchrony Financial vs. Hilton Worldwide Holdings | Synchrony Financial vs. NVIDIA | Synchrony Financial vs. JPMorgan Chase Co |
| Putnam Municipal vs. Invesco Municipal Income | Putnam Municipal vs. DWS Municipal Income | Putnam Municipal vs. MFS Municipal Income | Putnam Municipal vs. MFS High Income |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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