Correlation Between Synovus Financial and Socit Gnrale

Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Socit Gnrale 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 Socit Gnrale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on Synovus Financial and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Socit Gnrale.

Diversification Opportunities for Synovus Financial and Socit Gnrale

0.77

Correlation Coefficient

Synovus Financial  Socit Gnrale

Poor diversification

The 3 months correlation between Synovus and Socit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Synovus Financial i.e., Synovus Financial and Socit Gnrale go up and down completely randomly.

Pair Corralation between Synovus Financial and Socit Gnrale

Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 1.37 times more return on investment than Socit Gnrale. However, Synovus Financial is 1.37 times more volatile than Socit Gnrale Socit. It trades about 0.12 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.16 per unit of risk. If you would invest  3,950  in Synovus Financial Corp on September 23, 2024 and sell it today you would earn a total of  850.00  from holding Synovus Financial Corp or generate 21.52% 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.  Socit Gnrale Socit

Synovus Financial Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synovus Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Synovus Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Socit Gnrale Socit

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Socit Gnrale Socit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Socit Gnrale unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Synovus Financial and Socit Gnrale

The main advantage of trading using opposite Synovus Financial and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.

The idea behind Synovus Financial Corp and Socit Gnrale Socit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.