Correlation Between World Acceptance and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both World Acceptance and Synchrony 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 World Acceptance and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Acceptance and Synchrony Financial, you can compare the effects of market volatilities on World Acceptance and Synchrony 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 World Acceptance with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Acceptance and Synchrony Financial.
Diversification Opportunities for World Acceptance and Synchrony Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between World and Synchrony is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding World Acceptance and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and World Acceptance 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 World Acceptance are associated (or correlated) with Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of World Acceptance i.e., World Acceptance and Synchrony Financial go up and down completely randomly.
Pair Corralation between World Acceptance and Synchrony Financial
Given the investment horizon of 90 days World Acceptance is expected to generate 4.44 times more return on investment than Synchrony Financial. However, World Acceptance is 4.44 times more volatile than Synchrony Financial. It trades about 0.05 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.12 per unit of risk. If you would invest 11,789 in World Acceptance on August 28, 2024 and sell it today you would earn a total of 288.00 from holding World Acceptance or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Acceptance vs. Synchrony Financial
Performance |
| Timeline |
| World Acceptance |
| Synchrony Financial |
World Acceptance and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Acceptance and Synchrony Financial
The main advantage of trading using opposite World Acceptance and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Acceptance position performs unexpectedly, Synchrony 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| World Acceptance vs. FirstCash | World Acceptance vs. Enova International | World Acceptance vs. Green Dot | World Acceptance vs. Medallion Financial Corp |
| Synchrony Financial vs. Synchrony Financial | Synchrony Financial vs. Enova International | Synchrony Financial vs. EZCORP Inc | Synchrony Financial vs. World Acceptance |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |