Correlation Between Synchrony Financial and HCA Healthcare,

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

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

Diversification Opportunities for Synchrony Financial and HCA Healthcare,

-0.81

Correlation Coefficient

Synchrony Financial  HCA Healthcare,

Pay attention - limited upside

The 3 months correlation between Synchrony and HCA is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and HCA Healthcare, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare, 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 HCA Healthcare,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare, has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and HCA Healthcare, go up and down completely randomly.

Pair Corralation between Synchrony Financial and HCA Healthcare,

Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.3 times more return on investment than HCA Healthcare,. However, Synchrony Financial is 1.3 times more volatile than HCA Healthcare,. It trades about 0.23 of its potential returns per unit of risk. HCA Healthcare, is currently generating about -0.12 per unit of risk. If you would invest  28,220  in Synchrony Financial on October 8, 2024 and sell it today you would earn a total of  12,030  from holding Synchrony Financial or generate 42.63% return on investment over 90 days.

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

Synchrony Financial  vs.  HCA Healthcare,

Synchrony Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Synchrony Financial are ranked lower than 17 (%) 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.

HCA Healthcare,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HCA Healthcare, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Synchrony Financial and HCA Healthcare,

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

The idea behind Synchrony Financial and HCA Healthcare, 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.