Correlation Between Synchrony Financial and Datadog,

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

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

Diversification Opportunities for Synchrony Financial and Datadog,

0.92

Correlation Coefficient

Synchrony Financial  Datadog,

Almost no diversification

The 3 months correlation between Synchrony and Datadog, is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Datadog, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog, and Synchrony 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 Synchrony Financial are associated (or correlated) with Datadog,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datadog, has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Datadog, go up and down completely randomly.

Pair Corralation between Synchrony Financial and Datadog,

Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.64 times more return on investment than Datadog,. However, Synchrony Financial is 1.55 times less risky than Datadog,. It trades about -0.04 of its potential returns per unit of risk. Datadog, is currently generating about -0.27 per unit of risk. If you would invest  40,640  in Synchrony Financial on October 9, 2024 and sell it today you would lose (390.00) from holding Synchrony Financial or give up 0.96% of portfolio value over 90 days.

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

Synchrony Financial  vs.  Datadog,

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 somewhat weak basic indicators, Synchrony Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Datadog,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Datadog, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Synchrony Financial and Datadog,

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

The idea behind Synchrony Financial and Datadog, 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.