Correlation Between Synovus Financial and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Alaska Air 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 Alaska Air 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 Alaska Air Group, you can compare the effects of market volatilities on Synovus Financial and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Alaska Air.
Diversification Opportunities for Synovus Financial and Alaska Air
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Synovus and Alaska is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Synovus Financial i.e., Synovus Financial and Alaska Air go up and down completely randomly.
Pair Corralation between Synovus Financial and Alaska Air
Assuming the 90 days trading horizon Synovus Financial is expected to generate 1.31 times less return on investment than Alaska Air. In addition to that, Synovus Financial is 1.07 times more volatile than Alaska Air Group. It trades about 0.24 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.33 per unit of volatility. If you would invest 6,278 in Alaska Air Group on November 3, 2024 and sell it today you would earn a total of 784.00 from holding Alaska Air Group or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. Alaska Air Group
Performance |
| Timeline |
| Synovus Financial Corp |
| Alaska Air Group |
Synovus Financial and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Alaska Air
The main advantage of trading using opposite Synovus Financial and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Synovus Financial vs. SIVERS SEMICONDUCTORS AB | Synovus Financial vs. NorAm Drilling AS | Synovus Financial vs. Volkswagen AG | Synovus Financial vs. Darden Restaurants |
| Alaska Air vs. MCEWEN MINING INC | Alaska Air vs. Elmos Semiconductor SE | Alaska Air vs. Eurasia Mining Plc | Alaska Air vs. De Grey Mining |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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