Correlation Between Truist Financial and Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Bancorp 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 Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and The Bancorp, you can compare the effects of market volatilities on Truist Financial and Bancorp 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 Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Bancorp.
Diversification Opportunities for Truist Financial and Bancorp
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Bancorp is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and The Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancorp 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 Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Bancorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 4.19 times less risky than Bancorp. The preferred stock trades about -0.06 of its potential returns per unit of risk. The The Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,904 in The Bancorp on September 6, 2024 and sell it today you would earn a total of 875.00 from holding The Bancorp or generate 17.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Truist Financial vs. The Bancorp
Performance |
Timeline |
Truist Financial |
Bancorp |
Truist Financial and Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Truist Financial and Bancorp
The main advantage of trading using opposite Truist Financial and Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Bancorp 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 Bancorp will offset losses from the drop in Bancorp's long position.Truist Financial vs. Morgan Stanley | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp |
Bancorp vs. Heartland Financial USA | Bancorp vs. Heritage Commerce Corp | Bancorp vs. Business First Bancshares | Bancorp vs. German American Bancorp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |