Correlation Between Truist Financial and Under Armour
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Under Armour, you can compare the effects of market volatilities on Truist Financial and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Under Armour.
Diversification Opportunities for Truist Financial and Under Armour
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Truist and Under is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Under Armour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour has no effect on the direction of Truist Financial i.e., Truist Financial and Under Armour go up and down completely randomly.
Pair Corralation between Truist Financial and Under Armour
Assuming the 90 days trading horizon Truist Financial is expected to generate 0.64 times more return on investment than Under Armour. However, Truist Financial is 1.56 times less risky than Under Armour. It trades about 0.03 of its potential returns per unit of risk. Under Armour is currently generating about 0.01 per unit of risk. If you would invest 21,874 in Truist Financial on October 15, 2024 and sell it today you would earn a total of 4,439 from holding Truist Financial or generate 20.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial vs. Under Armour
Performance |
| Timeline |
| Truist Financial |
| Under Armour |
Truist Financial and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Under Armour
The main advantage of trading using opposite Truist Financial and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Truist Financial vs. Verizon Communications | Truist Financial vs. Brpr Corporate Offices | Truist Financial vs. Charter Communications | Truist Financial vs. United Natural Foods, |
| Under Armour vs. Sumitomo Mitsui Financial | Under Armour vs. Truist Financial | Under Armour vs. Jefferies Financial Group | Under Armour vs. Zoom Video Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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