Correlation Between Synovus Financial and Sixt Leasing

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

Diversification Opportunities for Synovus Financial and Sixt Leasing

-0.61

Correlation Coefficient

Synovus Financial  Sixt Leasing

Excellent diversification

The 3 months correlation between Synovus and Sixt is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE 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 Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of Synovus Financial i.e., Synovus Financial and Sixt Leasing go up and down completely randomly.

Pair Corralation between Synovus Financial and Sixt Leasing

Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 1.16 times more return on investment than Sixt Leasing. However, Synovus Financial is 1.16 times more volatile than Sixt Leasing SE. It trades about -0.09 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.11 per unit of risk. If you would invest  5,211  in Synovus Financial Corp on October 10, 2024 and sell it today you would lose (161.00) from holding Synovus Financial Corp or give up 3.09% of portfolio value over 90 days.

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

Synovus Financial Corp  vs.  Sixt Leasing SE

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 unsteady basic indicators, Synovus Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sixt Leasing SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sixt Leasing SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Synovus Financial and Sixt Leasing

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

The idea behind Synovus Financial Corp and Sixt Leasing SE 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.