Correlation Between Synchrony Financial and Springs Global

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

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

Diversification Opportunities for Synchrony Financial and Springs Global

0.0

Correlation Coefficient

Synchrony Financial  Springs Global

Pay attention - limited upside

The 3 months correlation between Synchrony and Springs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Springs Global Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Springs Global Parti 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 Springs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Springs Global Parti has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Springs Global go up and down completely randomly.

Pair Corralation between Synchrony Financial and Springs Global

If you would invest  28,220  in Synchrony Financial on October 11, 2024 and sell it today you would earn a total of  11,779  from holding Synchrony Financial or generate 41.74% return on investment over 90 days.

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

Synchrony Financial  vs.  Springs Global Participaes

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

Springs Global Parti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Springs Global Participaes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Springs Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Synchrony Financial and Springs Global

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

The idea behind Synchrony Financial and Springs Global Participaes 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.