Correlation Between Synovus Financial and Metro AG
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on Synovus Financial and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Metro AG.
Diversification Opportunities for Synovus Financial and Metro AG
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synovus and Metro is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Synovus Financial i.e., Synovus Financial and Metro AG go up and down completely randomly.
Pair Corralation between Synovus Financial and Metro AG
Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 1.35 times more return on investment than Metro AG. However, Synovus Financial is 1.35 times more volatile than Metro AG. It trades about 0.05 of its potential returns per unit of risk. Metro AG is currently generating about -0.07 per unit of risk. If you would invest 3,271 in Synovus Financial Corp on October 16, 2024 and sell it today you would earn a total of 1,779 from holding Synovus Financial Corp or generate 54.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. Metro AG
Performance |
| Timeline |
| Synovus Financial Corp |
| Metro AG |
Synovus Financial and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Metro AG
The main advantage of trading using opposite Synovus Financial and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| Synovus Financial vs. X FAB Silicon Foundries | Synovus Financial vs. Easy Software AG | Synovus Financial vs. UPDATE SOFTWARE | Synovus Financial vs. FANDIFI TECHNOLOGY P |
| Metro AG vs. CDN IMPERIAL BANK | Metro AG vs. Synovus Financial Corp | Metro AG vs. Webster Financial | Metro AG vs. United Insurance Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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