Correlation Between Truist Financial and Flagstar Financial,

Can any of the company-specific risk be diversified away by investing in both Truist Financial and Flagstar 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 Truist Financial and Flagstar Financial, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Truist Financial and Flagstar Financial,, you can compare the effects of market volatilities on Truist Financial and Flagstar 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 Truist Financial with a short position of Flagstar Financial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Flagstar Financial,.

Diversification Opportunities for Truist Financial and Flagstar Financial,

0.62

Correlation Coefficient

Truist Financial  Flagstar Financial,

Poor diversification

The 3 months correlation between Truist and Flagstar is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Flagstar Financial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagstar Financial, and Truist 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 Truist Financial are associated (or correlated) with Flagstar Financial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagstar Financial, has no effect on the direction of Truist Financial i.e., Truist Financial and Flagstar Financial, go up and down completely randomly.

Pair Corralation between Truist Financial and Flagstar Financial,

Assuming the 90 days trading horizon Truist Financial is expected to generate 0.19 times more return on investment than Flagstar Financial,. However, Truist Financial is 5.16 times less risky than Flagstar Financial,. It trades about -0.11 of its potential returns per unit of risk. Flagstar Financial, is currently generating about -0.09 per unit of risk. If you would invest  2,413  in Truist Financial on September 22, 2024 and sell it today you would lose (107.00) from holding Truist Financial or give up 4.43% of portfolio value over 90 days.

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

Truist Financial  vs.  Flagstar Financial,

Truist Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Truist Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Truist Financial is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Flagstar Financial,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Truist Financial and Flagstar Financial,

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

The idea behind Truist Financial and Flagstar Financial, 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.