Correlation Between Synchrony Financial and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and Cairo Communication 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 Synchrony Financial and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and Cairo Communication SpA, you can compare the effects of market volatilities on Synchrony Financial and Cairo Communication 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 Synchrony Financial with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and Cairo Communication.
Diversification Opportunities for Synchrony Financial and Cairo Communication
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synchrony and Cairo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and Synchrony 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 Synchrony Financial are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and Cairo Communication go up and down completely randomly.
Pair Corralation between Synchrony Financial and Cairo Communication
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 1.22 times more return on investment than Cairo Communication. However, Synchrony Financial is 1.22 times more volatile than Cairo Communication SpA. It trades about 0.28 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about -0.01 per unit of risk. If you would invest 5,006 in Synchrony Financial on April 23, 2025 and sell it today you would earn a total of 2,014 from holding Synchrony Financial or generate 40.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.77% |
Values | Daily Returns |
Synchrony Financial vs. Cairo Communication SpA
Performance |
Timeline |
Synchrony Financial |
Cairo Communication SpA |
Synchrony Financial and Cairo Communication Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Synchrony Financial and Cairo Communication
The main advantage of trading using opposite Synchrony Financial and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.Synchrony Financial vs. Fiinu PLC | Synchrony Financial vs. AFC Energy plc | Synchrony Financial vs. Argo Blockchain PLC | Synchrony Financial vs. SANTANDER UK 10 |
Cairo Communication vs. Fiinu PLC | Cairo Communication vs. AFC Energy plc | Cairo Communication vs. Argo Blockchain PLC | Cairo Communication vs. SANTANDER UK 10 |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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