Correlation Between Synovus Financial and ITALIAN WINE

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

Diversification Opportunities for Synovus Financial and ITALIAN WINE

0.6

Correlation Coefficient

Synovus Financial  ITALIAN WINE

Poor diversification

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

Pair Corralation between Synovus Financial and ITALIAN WINE

Assuming the 90 days trading horizon Synovus Financial Corp is expected to generate 0.71 times more return on investment than ITALIAN WINE. However, Synovus Financial Corp is 1.41 times less risky than ITALIAN WINE. It trades about -0.09 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about -0.09 per unit of risk. If you would invest  4,878  in Synovus Financial Corp on December 24, 2024 and sell it today you would lose (558.00) from holding Synovus Financial Corp or give up 11.44% of portfolio value over 90 days.

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

Synovus Financial Corp  vs.  ITALIAN WINE BRANDS

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.

ITALIAN WINE BRANDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITALIAN WINE BRANDS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Synovus Financial and ITALIAN WINE

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

The idea behind Synovus Financial Corp and ITALIAN WINE BRANDS 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.