Correlation Between Synchrony Financial and Blue Owl
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Blue Owl 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 Blue Owl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Blue Owl Capital, you can compare the effects of market volatilities on Synchrony Financial and Blue Owl 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 Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Blue Owl.
Diversification Opportunities for Synchrony Financial and Blue Owl
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synchrony and Blue is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital 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 Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Blue Owl go up and down completely randomly.
Pair Corralation between Synchrony Financial and Blue Owl
Considering the 90-day investment horizon Synchrony Financial is expected to generate 2.44 times more return on investment than Blue Owl. However, Synchrony Financial is 2.44 times more volatile than Blue Owl Capital. It trades about 0.11 of its potential returns per unit of risk. Blue Owl Capital is currently generating about 0.09 per unit of risk. If you would invest 3,337 in Synchrony Financial on September 13, 2024 and sell it today you would earn a total of 3,516 from holding Synchrony Financial or generate 105.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Synchrony Financial vs. Blue Owl Capital
Performance |
Timeline |
Synchrony Financial |
Blue Owl Capital |
Synchrony Financial and Blue Owl Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Synchrony Financial and Blue Owl
The main advantage of trading using opposite Synchrony Financial and Blue Owl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Blue Owl 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 Blue Owl will offset losses from the drop in Blue Owl's long position.Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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