Correlation Between European Metals and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Synchrony Financial, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Synchrony Financial.
Diversification Opportunities for European Metals and Synchrony Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and Synchrony is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and Synchrony Financial go up and down completely randomly.
Pair Corralation between European Metals and Synchrony Financial
Assuming the 90 days trading horizon European Metals is expected to generate 9.11 times less return on investment than Synchrony Financial. In addition to that, European Metals is 1.11 times more volatile than Synchrony Financial. It trades about 0.02 of its total potential returns per unit of risk. Synchrony Financial is currently generating about 0.16 per unit of volatility. If you would invest 5,005 in Synchrony Financial on September 23, 2024 and sell it today you would earn a total of 1,580 from holding Synchrony Financial or generate 31.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.48% |
Values | Daily Returns |
European Metals Holdings vs. Synchrony Financial
Performance |
Timeline |
European Metals Holdings |
Synchrony Financial |
European Metals and Synchrony Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with European Metals and Synchrony Financial
The main advantage of trading using opposite European Metals and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.European Metals vs. STMicroelectronics NV | European Metals vs. Worldwide Healthcare Trust | European Metals vs. Taiwan Semiconductor Manufacturing | European Metals vs. HCA Healthcare |
Synchrony Financial vs. Blackrock World Mining | Synchrony Financial vs. Gaztransport et Technigaz | Synchrony Financial vs. AMG Advanced Metallurgical | Synchrony Financial vs. Fulcrum Metals PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |