Correlation Between LO Funds and Synchrony Swiss

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Can any of the company-specific risk be diversified away by investing in both LO Funds and Synchrony Swiss 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 LO Funds and Synchrony Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LO Funds Swiss and Synchrony Swiss Real, you can compare the effects of market volatilities on LO Funds and Synchrony Swiss 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 LO Funds with a short position of Synchrony Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of LO Funds and Synchrony Swiss.

Diversification Opportunities for LO Funds and Synchrony Swiss

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between 0P00001R8Q and Synchrony is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding LO Funds Swiss and Synchrony Swiss Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Swiss Real and LO Funds 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 LO Funds Swiss are associated (or correlated) with Synchrony Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Swiss Real has no effect on the direction of LO Funds i.e., LO Funds and Synchrony Swiss go up and down completely randomly.

Pair Corralation between LO Funds and Synchrony Swiss

Assuming the 90 days trading horizon LO Funds Swiss is expected to under-perform the Synchrony Swiss. In addition to that, LO Funds is 1.33 times more volatile than Synchrony Swiss Real. It trades about -0.16 of its total potential returns per unit of risk. Synchrony Swiss Real is currently generating about 0.28 per unit of volatility. If you would invest  11,967  in Synchrony Swiss Real on September 28, 2024 and sell it today you would earn a total of  301.00  from holding Synchrony Swiss Real or generate 2.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.0%
ValuesDaily Returns

LO Funds Swiss  vs.  Synchrony Swiss Real

 Performance 
       Timeline  
LO Funds Swiss 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LO Funds Swiss has generated negative risk-adjusted returns adding no value to fund investors. Despite latest abnormal performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Synchrony Swiss Real 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Swiss Real are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Synchrony Swiss is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

LO Funds and Synchrony Swiss Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LO Funds and Synchrony Swiss

The main advantage of trading using opposite LO Funds and Synchrony Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LO Funds position performs unexpectedly, Synchrony Swiss 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 Swiss will offset losses from the drop in Synchrony Swiss' long position.
The idea behind LO Funds Swiss and Synchrony Swiss Real 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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