Correlation Between FirstCash and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both FirstCash and Synchrony Financial 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 FirstCash and Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Synchrony Financial, you can compare the effects of market volatilities on FirstCash and Synchrony Financial 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 FirstCash with a short position of Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Synchrony Financial.
Diversification Opportunities for FirstCash and Synchrony Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FirstCash and Synchrony is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial and FirstCash 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 FirstCash are associated (or correlated) with Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of FirstCash i.e., FirstCash and Synchrony Financial go up and down completely randomly.
Pair Corralation between FirstCash and Synchrony Financial
Given the investment horizon of 90 days FirstCash is expected to generate 2.41 times more return on investment than Synchrony Financial. However, FirstCash is 2.41 times more volatile than Synchrony Financial. It trades about 0.22 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.11 per unit of risk. If you would invest 12,208 in FirstCash on July 25, 2025 and sell it today you would earn a total of 3,264 from holding FirstCash or generate 26.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
FirstCash vs. Synchrony Financial
Performance |
| Timeline |
| FirstCash |
| Synchrony Financial |
FirstCash and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Synchrony Financial
The main advantage of trading using opposite FirstCash and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| FirstCash vs. SLM Corp | FirstCash vs. OneMain Holdings | FirstCash vs. Blue Owl Capital | FirstCash vs. Synchrony Financial |
| Synchrony Financial vs. Voya Financial | Synchrony Financial vs. AXIS Capital Holdings | Synchrony Financial vs. FirstCash | Synchrony Financial vs. Blue Owl Capital |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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