Correlation Between Truist Financial and AMB Financial
Can any of the company-specific risk be diversified away by investing in both Truist Financial and AMB 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 Truist Financial and AMB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and AMB Financial Corp, you can compare the effects of market volatilities on Truist Financial and AMB 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 Truist Financial with a short position of AMB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and AMB Financial.
Diversification Opportunities for Truist Financial and AMB Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Truist and AMB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and AMB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMB Financial Corp 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 AMB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMB Financial Corp has no effect on the direction of Truist Financial i.e., Truist Financial and AMB Financial go up and down completely randomly.
Pair Corralation between Truist Financial and AMB Financial
If you would invest 2,204 in Truist Financial on September 3, 2024 and sell it today you would earn a total of 116.00 from holding Truist Financial or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.68% |
| Values | Daily Returns |
Truist Financial vs. AMB Financial Corp
Performance |
| Timeline |
| Truist Financial |
| AMB Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Truist Financial and AMB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and AMB Financial
The main advantage of trading using opposite Truist Financial and AMB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, AMB 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 AMB Financial will offset losses from the drop in AMB Financial's long position.| Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. Truist Financial | Truist Financial vs. MetLife Preferred Stock |
| AMB Financial vs. First Community | AMB Financial vs. Community West Bancshares | AMB Financial vs. First Financial Northwest | AMB Financial vs. First Northwest 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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