Correlation Between Synchrony Financial and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Silvercrest Asset 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 Silvercrest Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Silvercrest Asset Management, you can compare the effects of market volatilities on Synchrony Financial and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Silvercrest Asset.
Diversification Opportunities for Synchrony Financial and Silvercrest Asset
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Synchrony and Silvercrest is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Silvercrest Asset go up and down completely randomly.
Pair Corralation between Synchrony Financial and Silvercrest Asset
Considering the 90-day investment horizon Synchrony Financial is expected to generate 1.03 times more return on investment than Silvercrest Asset. However, Synchrony Financial is 1.03 times more volatile than Silvercrest Asset Management. It trades about 0.15 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.03 per unit of risk. If you would invest 2,685 in Synchrony Financial on September 19, 2024 and sell it today you would earn a total of 3,674 from holding Synchrony Financial or generate 136.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. Silvercrest Asset Management
Performance |
| Timeline |
| Synchrony Financial |
| Silvercrest Asset |
Synchrony Financial and Silvercrest Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and Silvercrest Asset
The main advantage of trading using opposite Synchrony Financial and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset's long position.| Synchrony Financial vs. Visa Class A | Synchrony Financial vs. PayPal Holdings | 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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