Correlation Between Synovus Financial and Southern First
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Southern First 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 Synovus Financial and Southern First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synovus Financial Corp and Southern First Bancshares, you can compare the effects of market volatilities on Synovus Financial and Southern First 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 Synovus Financial with a short position of Southern First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Southern First.
Diversification Opportunities for Synovus Financial and Southern First
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Synovus and Southern is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Southern First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern First Bancshares and Synovus 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 Synovus Financial Corp are associated (or correlated) with Southern First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern First Bancshares has no effect on the direction of Synovus Financial i.e., Synovus Financial and Southern First go up and down completely randomly.
Pair Corralation between Synovus Financial and Southern First
Considering the 90-day investment horizon Synovus Financial Corp is expected to under-perform the Southern First. But the stock apears to be less risky and, when comparing its historical volatility, Synovus Financial Corp is 1.27 times less risky than Southern First. The stock trades about -0.36 of its potential returns per unit of risk. The Southern First Bancshares is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 4,401 in Southern First Bancshares on September 23, 2024 and sell it today you would lose (336.00) from holding Southern First Bancshares or give up 7.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Synovus Financial Corp vs. Southern First Bancshares
Performance |
Timeline |
Synovus Financial Corp |
Southern First Bancshares |
Synovus Financial and Southern First Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Synovus Financial and Southern First
The main advantage of trading using opposite Synovus Financial and Southern First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Southern First 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 Southern First will offset losses from the drop in Southern First's long position.Synovus Financial vs. Huntington Bancshares Incorporated | Synovus Financial vs. Fifth Third Bancorp | Synovus Financial vs. MT Bank | Synovus Financial vs. Citizens Financial Group, |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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