Correlation Between Synovus Financial and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and LIFENET INSURANCE 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 Synovus Financial and LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synovus Financial Corp and LIFENET INSURANCE CO, you can compare the effects of market volatilities on Synovus Financial and LIFENET INSURANCE 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 Synovus Financial with a short position of LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and LIFENET INSURANCE.
Diversification Opportunities for Synovus Financial and LIFENET INSURANCE
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Synovus and LIFENET is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE and Synovus 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 Synovus Financial Corp are associated (or correlated) with LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Synovus Financial i.e., Synovus Financial and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Synovus Financial and LIFENET INSURANCE
Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the LIFENET INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, Synovus Financial Corp is 1.4 times less risky than LIFENET INSURANCE. The stock trades about -0.07 of its potential returns per unit of risk. The LIFENET INSURANCE CO is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,200 in LIFENET INSURANCE CO on September 12, 2024 and sell it today you would lose (30.00) from holding LIFENET INSURANCE CO or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Synovus Financial Corp |
| LIFENET INSURANCE |
Synovus Financial and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and LIFENET INSURANCE
The main advantage of trading using opposite Synovus Financial and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| Synovus Financial vs. Superior Plus Corp | Synovus Financial vs. SIVERS SEMICONDUCTORS AB | Synovus Financial vs. CHINA HUARONG ENERHD 50 | Synovus Financial vs. NORDIC HALIBUT AS |
| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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