Correlation Between Synovus Financial and Hongkong
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Synovus Financial and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Hongkong.
Diversification Opportunities for Synovus Financial and Hongkong
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synovus and Hongkong is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Synovus Financial i.e., Synovus Financial and Hongkong go up and down completely randomly.
Pair Corralation between Synovus Financial and Hongkong
Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 2.16 times more return on investment than Hongkong. However, Synovus Financial is 2.16 times more volatile than The Hongkong and. It trades about 0.15 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.37 per unit of risk. If you would invest 5,111 in Synovus Financial Corp on October 17, 2024 and sell it today you would earn a total of 289.00 from holding Synovus Financial Corp or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. The Hongkong and
Performance |
| Timeline |
| Synovus Financial Corp |
| The Hongkong |
Synovus Financial and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Hongkong
The main advantage of trading using opposite Synovus Financial and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc |
| Hongkong vs. Synovus Financial Corp | Hongkong vs. Unity Software | Hongkong vs. Commonwealth Bank of | Hongkong vs. FORMPIPE SOFTWARE AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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