Correlation Between Oconee Financial and Synovus Financial

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

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

Diversification Opportunities for Oconee Financial and Synovus Financial

0.77

Correlation Coefficient

Oconee Financial  Synovus Financial

Poor diversification

The 3 months correlation between Oconee and Synovus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Financial 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 Oconee Financial 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 Oconee Financial 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 Oconee Financial i.e., Oconee Financial and Synovus Financial go up and down completely randomly.

Pair Corralation between Oconee Financial and Synovus Financial

Given the investment horizon of 90 days Oconee Financial is expected to generate 1.88 times more return on investment than Synovus Financial. However, Oconee Financial is 1.88 times more volatile than Synovus Financial Corp. It trades about 0.33 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about 0.18 per unit of risk. If you would invest  3,850  in Oconee Financial on September 15, 2024 and sell it today you would earn a total of  150.00  from holding Oconee Financial or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Oconee Financial  vs.  Synovus Financial Corp

Oconee Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oconee Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Oconee Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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 Oconee Financial and Synovus Financial

The main advantage of trading using opposite Oconee Financial and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Financial 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 Oconee Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..