Correlation Between Synovus Financial and Jazz Pharmaceuticals

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

Diversification Opportunities for Synovus Financial and Jazz Pharmaceuticals

-0.44

Correlation Coefficient

Synovus Financial  Jazz Pharmaceuticals

Very good diversification

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

Pair Corralation between Synovus Financial and Jazz Pharmaceuticals

Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the Jazz Pharmaceuticals. In addition to that, Synovus Financial is 1.13 times more volatile than Jazz Pharmaceuticals plc. It trades about -0.06 of its total potential returns per unit of risk. Jazz Pharmaceuticals plc is currently generating about 0.06 per unit of volatility. If you would invest  11,900  in Jazz Pharmaceuticals plc on December 27, 2024 and sell it today you would earn a total of  670.00  from holding Jazz Pharmaceuticals plc or generate 5.63% return on investment over 90 days.

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

Synovus Financial Corp  vs.  Jazz Pharmaceuticals plc

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.

Jazz Pharmaceuticals plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jazz Pharmaceuticals plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jazz Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Synovus Financial and Jazz Pharmaceuticals

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

The idea behind Synovus Financial Corp and Jazz Pharmaceuticals plc 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.