Correlation Between Synovus Financial and ZhongAn Online

Can any of the company-specific risk be diversified away by investing in both Synovus Financial and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on Synovus Financial and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and ZhongAn Online.

Diversification Opportunities for Synovus Financial and ZhongAn Online

-0.6

Correlation Coefficient

Synovus Financial  ZhongAn Online

Excellent diversification

The 3 months correlation between Synovus and ZhongAn is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Synovus Financial i.e., Synovus Financial and ZhongAn Online go up and down completely randomly.

Pair Corralation between Synovus Financial and ZhongAn Online

Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 0.79 times more return on investment than ZhongAn Online. However, Synovus Financial Corp is 1.27 times less risky than ZhongAn Online. It trades about 0.19 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.15 per unit of risk. If you would invest  3,891  in Synovus Financial Corp on October 8, 2024 and sell it today you would earn a total of  1,089  from holding Synovus Financial Corp or generate 27.99% return on investment over 90 days.

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

Synovus Financial Corp  vs.  ZhongAn Online P

Synovus Financial Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Synovus Financial Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Synovus Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Synovus Financial and ZhongAn Online

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

The idea behind Synovus Financial Corp and ZhongAn Online P 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.