Correlation Between Synchrony Financial and Coincheck Group

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

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

Diversification Opportunities for Synchrony Financial and Coincheck Group

0.44

Correlation Coefficient

Synchrony Financial  Coincheck Group

Very weak diversification

The 3 months correlation between Synchrony and Coincheck is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Coincheck Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coincheck Group NV 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 Coincheck Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coincheck Group NV has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Coincheck Group go up and down completely randomly.

Pair Corralation between Synchrony Financial and Coincheck Group

Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.07 times more return on investment than Coincheck Group. However, Synchrony Financial is 14.55 times less risky than Coincheck Group. It trades about -0.01 of its potential returns per unit of risk. Coincheck Group NV is currently generating about -0.04 per unit of risk. If you would invest  1,879  in Synchrony Financial on December 22, 2024 and sell it today you would lose (10.00) from holding Synchrony Financial or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Synchrony Financial  vs.  Coincheck Group NV

Synchrony Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Synchrony Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Synchrony Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Coincheck Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coincheck Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward-looking signals remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Synchrony Financial and Coincheck Group

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

The idea behind Synchrony Financial and Coincheck Group NV 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.