Correlation Between Cresud SACIF and Synovus Financial

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

By analyzing existing cross correlation between Cresud SACIF y and Synovus Financial Corp, you can compare the effects of market volatilities on Cresud SACIF and Synovus 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 Cresud SACIF with a short position of Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Synovus Financial.

Diversification Opportunities for Cresud SACIF and Synovus Financial

0.63

Correlation Coefficient

Cresud SACIF  Synovus Financial

Poor diversification

The 3 months correlation between Cresud and Synovus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Synovus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synovus Financial Corp and Cresud SACIF 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 Cresud SACIF y are associated (or correlated) with Synovus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synovus Financial Corp has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Synovus Financial go up and down completely randomly.

Pair Corralation between Cresud SACIF and Synovus Financial

Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.12 times more return on investment than Synovus Financial. However, Cresud SACIF is 1.12 times more volatile than Synovus Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.04 per unit of risk. If you would invest  559.00  in Cresud SACIF y on October 4, 2024 and sell it today you would earn a total of  779.00  from holding Cresud SACIF y or generate 139.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.8%
Values	Daily Returns

Cresud SACIF y  vs.  Synovus Financial Corp

Cresud SACIF y

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

Synovus Financial Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Synovus Financial Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Synovus Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cresud SACIF and Synovus Financial

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

The idea behind Cresud SACIF y and Synovus Financial Corp 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.