Correlation Between Synovus Financial and Herms International
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Herms International 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 Herms International 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 Herms International Socit, you can compare the effects of market volatilities on Synovus Financial and Herms International 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 Herms International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Herms International.
Diversification Opportunities for Synovus Financial and Herms International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Synovus and Herms is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit 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 Herms International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of Synovus Financial i.e., Synovus Financial and Herms International go up and down completely randomly.
Pair Corralation between Synovus Financial and Herms International
Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the Herms International. But the stock apears to be less risky and, when comparing its historical volatility, Synovus Financial Corp is 1.03 times less risky than Herms International. The stock trades about -0.04 of its potential returns per unit of risk. The Herms International Socit is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 203,600 in Herms International Socit on October 30, 2024 and sell it today you would earn a total of 60,400 from holding Herms International Socit or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Synovus Financial Corp vs. Herms International Socit
Performance |
| Timeline |
| Synovus Financial Corp |
| Herms International Socit |
Synovus Financial and Herms International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Herms International
The main advantage of trading using opposite Synovus Financial and Herms International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Herms International 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 Herms International will offset losses from the drop in Herms International's long position.| Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc |
| Herms International vs. Park Hotels Resorts | Herms International vs. CompuGroup Medical SE | Herms International vs. NH HOTEL GROUP | Herms International vs. Japan Medical Dynamic |
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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