Correlation Between Mobilezone Holding and Synchrony Financial

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

By analyzing existing cross correlation between mobilezone holding AG and Synchrony Financial, you can compare the effects of market volatilities on Mobilezone Holding and Synchrony Financial 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 Mobilezone Holding with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilezone Holding and Synchrony Financial.

Diversification Opportunities for Mobilezone Holding and Synchrony Financial

-0.29

Correlation Coefficient

Mobilezone Holding  Synchrony Financial

Very good diversification

The 3 months correlation between Mobilezone and Synchrony is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding mobilezone holding AG and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Mobilezone Holding 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 mobilezone holding AG are associated (or correlated) with Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Mobilezone Holding i.e., Mobilezone Holding and Synchrony Financial go up and down completely randomly.

Pair Corralation between Mobilezone Holding and Synchrony Financial

Assuming the 90 days trading horizon mobilezone holding AG is expected to under-perform the Synchrony Financial. But the stock apears to be less risky and, when comparing its historical volatility, mobilezone holding AG is 1.22 times less risky than Synchrony Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Synchrony Financial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,686  in Synchrony Financial on October 20, 2024 and sell it today you would earn a total of  2,168  from holding Synchrony Financial or generate 46.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.23%
Values	Daily Returns

mobilezone holding AG  vs.  Synchrony Financial

mobilezone holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days mobilezone holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Synchrony Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Synchrony Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobilezone Holding and Synchrony Financial

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

The idea behind mobilezone holding AG and Synchrony Financial 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .