Correlation Between Dupont De and Synovus Financial

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

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

Diversification Opportunities for Dupont De and Synovus Financial

-0.26

Correlation Coefficient

Dupont De  Synovus Financial

Very good diversification

The 3 months correlation between Dupont and Synovus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Synovus Financial go up and down completely randomly.

Pair Corralation between Dupont De and Synovus Financial

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Synovus Financial. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.77 times less risky than Synovus Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Synovus Financial Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,486  in Synovus Financial Corp on October 23, 2024 and sell it today you would earn a total of  764.00  from holding Synovus Financial Corp or generate 17.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Dupont De Nemours  vs.  Synovus Financial Corp

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Synovus Financial Corp

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Dupont De and Synovus Financial

The main advantage of trading using opposite Dupont De and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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 Dupont De Nemours 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.