Correlation Between Synovus Financial and Platinum Investment

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

Diversification Opportunities for Synovus Financial and Platinum Investment

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Synovus and Platinum is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment 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 Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of Synovus Financial i.e., Synovus Financial and Platinum Investment go up and down completely randomly.

Pair Corralation between Synovus Financial and Platinum Investment

Assuming the 90 days trading horizon Synovus Financial Corp is expected to under-perform the Platinum Investment. But the stock apears to be less risky and, when comparing its historical volatility, Synovus Financial Corp is 2.93 times less risky than Platinum Investment. The stock trades about -0.17 of its potential returns per unit of risk. The Platinum Investment Management is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Platinum Investment Management on October 12, 2024 and sell it today you would earn a total of  8.00  from holding Platinum Investment Management or generate 23.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Synovus Financial Corp  vs.  Platinum Investment Management

 Performance 
       Timeline  
Synovus Financial Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Synovus Financial Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Synovus Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.
Platinum Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Platinum Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Platinum Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Synovus Financial and Platinum Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Synovus Financial and Platinum Investment

The main advantage of trading using opposite Synovus Financial and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Platinum Investment 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 Platinum Investment will offset losses from the drop in Platinum Investment's long position.
The idea behind Synovus Financial Corp and Platinum Investment Management 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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