Correlation Between Synchrony Financial and Eaton Vance

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

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

Diversification Opportunities for Synchrony Financial and Eaton Vance

-0.44

Correlation Coefficient

Synchrony Financial  Eaton Vance

Very good diversification

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

Pair Corralation between Synchrony Financial and Eaton Vance

Considering the 90-day investment horizon Synchrony Financial is expected to under-perform the Eaton Vance. In addition to that, Synchrony Financial is 2.82 times more volatile than Eaton Vance Municipal. It trades about -0.13 of its total potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.11 per unit of volatility. If you would invest  992.00  in Eaton Vance Municipal on December 26, 2024 and sell it today you would earn a total of  49.00  from holding Eaton Vance Municipal or generate 4.94% return on investment over 90 days.

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

Synchrony Financial  vs.  Eaton Vance Municipal

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Eaton Vance Municipal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Municipal are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Synchrony Financial and Eaton Vance

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

The idea behind Synchrony Financial and Eaton Vance Municipal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.