Correlation Between FORTEC ELEKTRONIK and Synchrony Financial

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

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

Diversification Opportunities for FORTEC ELEKTRONIK and Synchrony Financial

0.09

Correlation Coefficient

FORTEC ELEKTRONIK  Synchrony Financial

Significant diversification

The 3 months correlation between FORTEC and Synchrony is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding FORTEC ELEKTRONIK and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK i.e., FORTEC ELEKTRONIK and Synchrony Financial go up and down completely randomly.

Pair Corralation between FORTEC ELEKTRONIK and Synchrony Financial

Assuming the 90 days trading horizon FORTEC ELEKTRONIK is expected to under-perform the Synchrony Financial. In addition to that, FORTEC ELEKTRONIK is 1.14 times more volatile than Synchrony Financial. It trades about -0.01 of its total potential returns per unit of risk. Synchrony Financial is currently generating about 0.01 per unit of volatility. If you would invest  6,426  in Synchrony Financial on October 10, 2024 and sell it today you would earn a total of  10.00  from holding Synchrony Financial or generate 0.16% return on investment over 90 days.

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

FORTEC ELEKTRONIK  vs.  Synchrony Financial

FORTEC ELEKTRONIK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORTEC ELEKTRONIK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, FORTEC ELEKTRONIK is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Synchrony Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Financial are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Synchrony Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORTEC ELEKTRONIK and Synchrony Financial

The main advantage of trading using opposite FORTEC ELEKTRONIK and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.