Correlation Between Synovus Financial and IND+COMMBK CHINA

Can any of the company-specific risk be diversified away by investing in both Synovus Financial and IND+COMMBK CHINA 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 IND+COMMBK CHINA 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 INDCOMMBK CHINA ADR20, you can compare the effects of market volatilities on Synovus Financial and IND+COMMBK CHINA 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 IND+COMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and IND+COMMBK CHINA.

Diversification Opportunities for Synovus Financial and IND+COMMBK CHINA

-0.11

Correlation Coefficient

Synovus Financial  IND+COMMBK CHINA

Good diversification

The 3 months correlation between Synovus and IND+COMMBK is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and INDCOMMBK CHINA ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDCOMMBK CHINA ADR20 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 IND+COMMBK CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDCOMMBK CHINA ADR20 has no effect on the direction of Synovus Financial i.e., Synovus Financial and IND+COMMBK CHINA go up and down completely randomly.

Pair Corralation between Synovus Financial and IND+COMMBK CHINA

Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the IND+COMMBK CHINA. In addition to that, Synovus Financial is 1.22 times more volatile than INDCOMMBK CHINA ADR20. It trades about -0.09 of its total potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about 0.09 per unit of volatility. If you would invest  1,208  in INDCOMMBK CHINA ADR20 on December 25, 2024 and sell it today you would earn a total of  102.00  from holding INDCOMMBK CHINA ADR20 or generate 8.44% return on investment over 90 days.

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

Synovus Financial Corp  vs.  INDCOMMBK CHINA ADR20

Synovus Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Synovus Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

INDCOMMBK CHINA ADR20

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDCOMMBK CHINA ADR20 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, IND+COMMBK CHINA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Synovus Financial and IND+COMMBK CHINA

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

The idea behind Synovus Financial Corp and INDCOMMBK CHINA ADR20 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.