Correlation Between Synchrony Financial and Yotta Acquisition
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Yotta Acquisition 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 Synchrony Financial and Yotta Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Yotta Acquisition Corp, you can compare the effects of market volatilities on Synchrony Financial and Yotta Acquisition 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 Synchrony Financial with a short position of Yotta Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Yotta Acquisition.
Diversification Opportunities for Synchrony Financial and Yotta Acquisition
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synchrony and Yotta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Yotta Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition Corp and Synchrony 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 Synchrony Financial are associated (or correlated) with Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition Corp has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Yotta Acquisition go up and down completely randomly.
Pair Corralation between Synchrony Financial and Yotta Acquisition
Considering the 90-day investment horizon Synchrony Financial is expected to generate 2.75 times more return on investment than Yotta Acquisition. However, Synchrony Financial is 2.75 times more volatile than Yotta Acquisition Corp. It trades about 0.21 of its potential returns per unit of risk. Yotta Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest 4,712 in Synchrony Financial on September 16, 2024 and sell it today you would earn a total of 2,094 from holding Synchrony Financial or generate 44.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Synchrony Financial vs. Yotta Acquisition Corp
Performance |
Timeline |
Synchrony Financial |
Yotta Acquisition Corp |
Synchrony Financial and Yotta Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Synchrony Financial and Yotta Acquisition
The main advantage of trading using opposite Synchrony Financial and Yotta Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Yotta Acquisition 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 Yotta Acquisition will offset losses from the drop in Yotta Acquisition's long position.Synchrony Financial vs. Visa Class A | Synchrony Financial vs. PayPal Holdings | Synchrony Financial vs. Upstart Holdings | Synchrony Financial vs. Mastercard |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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