Correlation Between Synchrony Swiss and CSIF I

Can any of the company-specific risk be diversified away by investing in both Synchrony Swiss and CSIF I 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 Swiss and CSIF I into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Synchrony Swiss Real and CSIF I Real, you can compare the effects of market volatilities on Synchrony Swiss and CSIF I 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 Swiss with a short position of CSIF I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Swiss and CSIF I.

Diversification Opportunities for Synchrony Swiss and CSIF I

0.91

Correlation Coefficient

Synchrony Swiss  CSIF I

Almost no diversification

The 3 months correlation between Synchrony and CSIF is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Swiss Real and CSIF I Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF I Real and Synchrony Swiss 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 Swiss Real are associated (or correlated) with CSIF I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF I Real has no effect on the direction of Synchrony Swiss i.e., Synchrony Swiss and CSIF I go up and down completely randomly.

Pair Corralation between Synchrony Swiss and CSIF I

Assuming the 90 days trading horizon Synchrony Swiss is expected to generate 2.11 times less return on investment than CSIF I. But when comparing it to its historical volatility, Synchrony Swiss Real is 1.13 times less risky than CSIF I. It trades about 0.12 of its potential returns per unit of risk. CSIF I Real is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  187,379  in CSIF I Real on September 27, 2024 and sell it today you would earn a total of  13,929  from holding CSIF I Real or generate 7.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Synchrony Swiss Real  vs.  CSIF I Real

Synchrony Swiss Real

Risk-Adjusted Performance

9 of 100

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.

CSIF I Real

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF I Real are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unsteady technical and fundamental indicators, CSIF I may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Synchrony Swiss and CSIF I

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

The idea behind Synchrony Swiss Real and CSIF I 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.