Correlation Between Synovus Financial and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor, you can compare the effects of market volatilities on Synovus Financial and Tower Semiconductor 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 Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Tower Semiconductor.
Diversification Opportunities for Synovus Financial and Tower Semiconductor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synovus and Tower is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor 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 Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Synovus Financial i.e., Synovus Financial and Tower Semiconductor go up and down completely randomly.
Pair Corralation between Synovus Financial and Tower Semiconductor
Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 1.14 times more return on investment than Tower Semiconductor. However, Synovus Financial is 1.14 times more volatile than Tower Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Tower Semiconductor is currently generating about 0.02 per unit of risk. If you would invest 3,485 in Synovus Financial Corp on August 31, 2024 and sell it today you would earn a total of 1,915 from holding Synovus Financial Corp or generate 54.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synovus Financial Corp vs. Tower Semiconductor
Performance |
| Timeline |
| Synovus Financial Corp |
| Tower Semiconductor |
Synovus Financial and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Tower Semiconductor
The main advantage of trading using opposite Synovus Financial and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| Synovus Financial vs. Tower Semiconductor | Synovus Financial vs. ADRIATIC METALS LS 013355 | Synovus Financial vs. BJs Restaurants | Synovus Financial vs. Cass Information Systems |
| Tower Semiconductor vs. Addus HomeCare | Tower Semiconductor vs. Strategic Investments AS | Tower Semiconductor vs. MAVEN WIRELESS SWEDEN | Tower Semiconductor vs. MTI WIRELESS EDGE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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