Correlation Between Truist Financial and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Academy Sports 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 Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Academy Sports and, you can compare the effects of market volatilities on Truist Financial and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Academy Sports.
Diversification Opportunities for Truist Financial and Academy Sports
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Academy is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Academy Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports has no effect on the direction of Truist Financial i.e., Truist Financial and Academy Sports go up and down completely randomly.
Pair Corralation between Truist Financial and Academy Sports
Assuming the 90 days trading horizon Truist Financial is expected to generate 2.16 times more return on investment than Academy Sports. However, Truist Financial is 2.16 times more volatile than Academy Sports and. It trades about 0.16 of its potential returns per unit of risk. Academy Sports and is currently generating about -0.36 per unit of risk. If you would invest 26,973 in Truist Financial on November 6, 2024 and sell it today you would earn a total of 959.00 from holding Truist Financial or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Truist Financial vs. Academy Sports and
Performance |
| Timeline |
| Truist Financial |
| Academy Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Truist Financial and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Academy Sports
The main advantage of trading using opposite Truist Financial and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Truist Financial vs. Check Point Software | Truist Financial vs. Raytheon Technologies | Truist Financial vs. New Oriental Education | Truist Financial vs. Extra Space Storage |
| Academy Sports vs. Taiwan Semiconductor Manufacturing | Academy Sports vs. Apple Inc | Academy Sports vs. Alibaba Group Holding | Academy Sports vs. Microsoft |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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