Correlation Between Volkswagen and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Synovus Financial 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 Volkswagen and Synovus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Synovus Financial Corp, you can compare the effects of market volatilities on Volkswagen and Synovus Financial 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 Volkswagen with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Synovus Financial.
Diversification Opportunities for Volkswagen and Synovus Financial
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Synovus is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Synovus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synovus Financial Corp and Volkswagen 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 Volkswagen AG are associated (or correlated) with Synovus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synovus Financial Corp has no effect on the direction of Volkswagen i.e., Volkswagen and Synovus Financial go up and down completely randomly.
Pair Corralation between Volkswagen and Synovus Financial
Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the Synovus Financial. But the stock apears to be less risky and, when comparing its historical volatility, Volkswagen AG is 1.7 times less risky than Synovus Financial. The stock trades about -0.06 of its potential returns per unit of risk. The Synovus Financial Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,816 in Synovus Financial Corp on August 26, 2024 and sell it today you would earn a total of 2,434 from holding Synovus Financial Corp or generate 86.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Synovus Financial Corp
Performance |
| Timeline |
| Volkswagen AG |
| Synovus Financial Corp |
Volkswagen and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Synovus Financial
The main advantage of trading using opposite Volkswagen and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Synovus Financial 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 Synovus Financial will offset losses from the drop in Synovus Financial's long position.| Volkswagen vs. Ultra Clean Holdings | Volkswagen vs. Grand Canyon Education | Volkswagen vs. Sunstone Hotel Investors | Volkswagen vs. ULTRA CLEAN HLDGS |
| Synovus Financial vs. Superior Plus Corp | Synovus Financial vs. NMI Holdings | Synovus Financial vs. Origin Agritech | Synovus Financial vs. SIVERS SEMICONDUCTORS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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