Correlation Between First Citizens and Truist Financial
Can any of the company-specific risk be diversified away by investing in both First Citizens and Truist 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 First Citizens and Truist Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Citizens BancShares and Truist Financial, you can compare the effects of market volatilities on First Citizens and Truist 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 First Citizens with a short position of Truist Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Citizens and Truist Financial.
Diversification Opportunities for First Citizens and Truist Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Truist is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Citizens BancShares and Truist Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truist Financial and First Citizens 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 First Citizens BancShares are associated (or correlated) with Truist Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truist Financial has no effect on the direction of First Citizens i.e., First Citizens and Truist Financial go up and down completely randomly.
Pair Corralation between First Citizens and Truist Financial
Assuming the 90 days horizon First Citizens BancShares is expected to generate 0.99 times more return on investment than Truist Financial. However, First Citizens BancShares is 1.01 times less risky than Truist Financial. It trades about 0.06 of its potential returns per unit of risk. Truist Financial is currently generating about 0.04 per unit of risk. If you would invest 1,759 in First Citizens BancShares on September 3, 2024 and sell it today you would earn a total of 631.00 from holding First Citizens BancShares or generate 35.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Citizens BancShares vs. Truist Financial
Performance |
| Timeline |
| First Citizens BancShares |
| Truist Financial |
First Citizens and Truist Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Citizens and Truist Financial
The main advantage of trading using opposite First Citizens and Truist Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Citizens position performs unexpectedly, Truist 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 Truist Financial will offset losses from the drop in Truist Financial's long position.| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
| Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. MetLife Preferred Stock |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |