Correlation Between MNB Holdings and Synovus Financial

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

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

Diversification Opportunities for MNB Holdings and Synovus Financial

0.47

Correlation Coefficient

MNB Holdings  Synovus Financial

Very weak diversification

The 3 months correlation between MNB and Synovus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MNB Holdings Corp 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 MNB Holdings 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 MNB Holdings Corp 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 MNB Holdings i.e., MNB Holdings and Synovus Financial go up and down completely randomly.

Pair Corralation between MNB Holdings and Synovus Financial

Given the investment horizon of 90 days MNB Holdings Corp is expected to under-perform the Synovus Financial. In addition to that, MNB Holdings is 1.7 times more volatile than Synovus Financial Corp. It trades about -0.01 of its total potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.04 per unit of volatility. If you would invest  2,001  in Synovus Financial Corp on September 15, 2024 and sell it today you would earn a total of  513.00  from holding Synovus Financial Corp or generate 25.64% return on investment over 90 days.

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

MNB Holdings Corp  vs.  Synovus Financial Corp

MNB Holdings Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MNB Holdings Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, MNB Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Synovus Financial Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synovus Financial Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Synovus Financial is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MNB Holdings and Synovus Financial

The main advantage of trading using opposite MNB Holdings and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MNB Holdings 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 MNB Holdings Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.