Correlation Between Coincheck Group and Synchrony Financial

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

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

Diversification Opportunities for Coincheck Group and Synchrony Financial

0.05

Correlation Coefficient

Coincheck Group  Synchrony Financial

Significant diversification

The 3 months correlation between Coincheck and Synchrony is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Coincheck Group NV and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and Coincheck Group 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 Coincheck Group NV 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 Coincheck Group i.e., Coincheck Group and Synchrony Financial go up and down completely randomly.

Pair Corralation between Coincheck Group and Synchrony Financial

Assuming the 90 days horizon Coincheck Group NV is expected to under-perform the Synchrony Financial. In addition to that, Coincheck Group is 17.94 times more volatile than Synchrony Financial. It trades about -0.04 of its total potential returns per unit of risk. Synchrony Financial is currently generating about 0.13 per unit of volatility. If you would invest  2,584  in Synchrony Financial on October 27, 2024 and sell it today you would earn a total of  48.00  from holding Synchrony Financial or generate 1.86% return on investment over 90 days.

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

Coincheck Group NV  vs.  Synchrony Financial

Coincheck Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coincheck Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Synchrony Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Synchrony Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coincheck Group and Synchrony Financial

The main advantage of trading using opposite Coincheck Group and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coincheck Group 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 Coincheck Group NV 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.