Discover Financial Correlations

DFS Stock

USD 166.14 3.52 2.07%

The current 90-days correlation between Discover Financial and Ally Financial is 0.67 (i.e., Poor diversification). The correlation of Discover Financial is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Discover Financial Correlation With Market

Very weak diversification

The correlation between Discover Financial Services and DJI is 0.55 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and DJI in the same portfolio, assuming nothing else is changed.

Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Discover Financial Services. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in census.

Moving together with Discover Stock

0.61	MA	Mastercard	Pair Corr
0.72	ECPG	Encore Capital Group	Pair Corr
0.87	AXP	American Express	Pair Corr
0.84	CNF	CNFinance Holdings	Pair Corr
0.99	COF	Capital One Financial	Pair Corr
0.71	SYF	Synchrony Financial	Pair Corr
0.67	PFSI	PennyMac Finl Svcs	Pair Corr
0.86	ALLY	Ally Financial Normal Trading	Pair Corr
0.71	SOFI	SoFi Technologies Aggressive Push	Pair Corr
0.69	UPST	Upstart Holdings	Pair Corr
0.91	C	Citigroup Aggressive Push	Pair Corr
0.89	BN	Brookfield Corp	Pair Corr
0.72	BX	Blackstone Group	Pair Corr
0.87	BY	Byline Bancorp	Pair Corr
0.82	CG	Carlyle Group Normal Trading	Pair Corr
0.67	FG	FG Annuities Life	Pair Corr
0.94	GS	Goldman Sachs Group	Pair Corr
0.63	KB	KB Financial Group	Pair Corr

Moving against Discover Stock

0.71	RENEW	Cartesian Growth	Pair Corr
0.7	TW	Tradeweb Markets	Pair Corr
0.62	CB	Chubb	Pair Corr
0.61	HG	Hamilton Insurance Group,	Pair Corr
0.49	EG	Everest Group	Pair Corr
0.48	DB	Deutsche Bank AG	Pair Corr
0.44	LU	Lufax Holding	Pair Corr
0.34	LX	Lexinfintech Holdings	Pair Corr

Related Correlations Analysis

	ALLY	SYF-PA	WU	BFH	AXP	MA	V	PYPL	COF	SYF
ALLY		0.45	-0.32	0.73	0.76	0.57	0.41	0.33	0.9	0.6	ALLY
SYF-PA	0.45		-0.23	0.49	0.52	0.24	0.17	0.23	0.54	0.41	SYF-PA
WU	-0.32	-0.23		-0.59	-0.57	0.2	0.35	-0.64	-0.35	-0.64	WU
BFH	0.73	0.49	-0.59		0.91	0.13	-0.11	0.74	0.72	0.9	BFH
AXP	0.76	0.52	-0.57	0.91		0.27	-0.02	0.74	0.83	0.95	AXP
MA	0.57	0.24	0.2	0.13	0.27		0.93	-0.36	0.68	-0.01	MA
V	0.41	0.17	0.35	-0.11	-0.02	0.93		-0.63	0.49	-0.3	V
PYPL	0.33	0.23	-0.64	0.74	0.74	-0.36	-0.63		0.31	0.9	PYPL
COF	0.9	0.54	-0.35	0.72	0.83	0.68	0.49	0.31		0.64	COF
SYF	0.6	0.41	-0.64	0.9	0.95	-0.01	-0.3	0.9	0.64		SYF
	ALLY	SYF-PA	WU	BFH	AXP	MA	V	PYPL	COF	SYF

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

SYF	+ 0.95	AXP
V	+ 0.93	MA
AXP	+ 0.91	BFH
COF	+ 0.9	ALLY
SYF	+ 0.9	BFH
SYF	+ 0.9	PYPL

High negative correlations

SYF	- 0.64	WU
PYPL	- 0.64	WU
PYPL	- 0.63	V
BFH	- 0.59	WU
AXP	- 0.57	WU
PYPL	- 0.36	MA

Risk-Adjusted Indicators

There is a big difference between Discover Stock performing well and Discover Financial Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Discover Financial's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
ALLY	1.45	0.12	0.06	0.07	1.86	(1.41)	3.38	(3.32)	10.23
SYF-PA	0.60	(0.02)	0.00	(0.12)	0.00	0.00	1.32	(1.33)	5.87
WU	1.19	0.05	0.03	0.08	1.66	(1.29)	3.31	(1.86)	11.48
BFH	1.73	(0.32)	0.00	(0.20)	0.00	0.00	3.60	(4.19)	8.63
AXP	1.25	(0.05)	0.00	(0.04)	0.00	0.00	2.72	(3.01)	8.33
MA	0.85	0.08	0.07	0.08	1.07	(0.89)	2.03	(1.87)	6.59
V	0.81	0.16	0.14	0.17	0.91	(0.86)	1.96	(1.56)	5.06
PYPL	1.65	(0.28)	0.00	(0.20)	0.00	0.00	3.05	(3.29)	16.97
COF	1.64	0.07	0.03	0.04	2.51	(1.46)	3.45	(3.85)	9.74
SYF	1.61	(0.19)	0.00	(0.12)	0.00	0.00	3.10	(3.82)	7.68

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