Correlation Between MT Bank and Triumph Financial
Can any of the company-specific risk be diversified away by investing in both MT Bank and Triumph 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 MT Bank and Triumph Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank and Triumph Financial, you can compare the effects of market volatilities on MT Bank and Triumph 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 MT Bank with a short position of Triumph Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Triumph Financial.
Diversification Opportunities for MT Bank and Triumph Financial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MTB and Triumph is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank and Triumph Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Financial and MT Bank 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 MT Bank are associated (or correlated) with Triumph Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Financial has no effect on the direction of MT Bank i.e., MT Bank and Triumph Financial go up and down completely randomly.
Pair Corralation between MT Bank and Triumph Financial
Considering the 90-day investment horizon MT Bank is expected to generate 2.09 times more return on investment than Triumph Financial. However, MT Bank is 2.09 times more volatile than Triumph Financial. It trades about 0.2 of its potential returns per unit of risk. Triumph Financial is currently generating about 0.06 per unit of risk. If you would invest 19,723 in MT Bank on August 28, 2024 and sell it today you would earn a total of 2,472 from holding MT Bank or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MT Bank vs. Triumph Financial
Performance |
| Timeline |
| MT Bank |
| Triumph Financial |
MT Bank and Triumph Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Triumph Financial
The main advantage of trading using opposite MT Bank and Triumph Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, Triumph 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 Triumph Financial will offset losses from the drop in Triumph Financial's long position.| MT Bank vs. US Bancorp | MT Bank vs. Truist Financial Corp | MT Bank vs. Fifth Third Bancorp | MT Bank vs. KeyCorp |
| Triumph Financial vs. Fifth Third Bancorp | Triumph Financial vs. Huntington Bancshares Incorporated | Triumph Financial vs. MT Bank |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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