Correlation Between Synovus Financial and NEXON
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and NEXON 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 NEXON 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 NEXON Co, you can compare the effects of market volatilities on Synovus Financial and NEXON 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 NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and NEXON.
Diversification Opportunities for Synovus Financial and NEXON
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Synovus and NEXON is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON 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 NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of Synovus Financial i.e., Synovus Financial and NEXON go up and down completely randomly.
Pair Corralation between Synovus Financial and NEXON
Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the NEXON. But the stock apears to be less risky and, when comparing its historical volatility, Synovus Financial Corp is 1.33 times less risky than NEXON. The stock trades about -0.06 of its potential returns per unit of risk. The NEXON Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,340 in NEXON Co on October 11, 2024 and sell it today you would lose (10.00) from holding NEXON Co or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. NEXON Co
Performance |
| Timeline |
| Synovus Financial Corp |
| NEXON |
Synovus Financial and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and NEXON
The main advantage of trading using opposite Synovus Financial and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| Synovus Financial vs. Digilife Technologies Limited | Synovus Financial vs. Siamgas And Petrochemicals | Synovus Financial vs. Soken Chemical Engineering | Synovus Financial vs. Mitsubishi Gas Chemical |
| NEXON vs. JSC Halyk bank | NEXON vs. Synovus Financial Corp | NEXON vs. CONTAGIOUS GAMING INC | NEXON vs. SUN LIFE FINANCIAL |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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