Correlation Between Truist Financial and Esquire Financial
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Esquire 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 Esquire 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 Esquire Financial Holdings, you can compare the effects of market volatilities on Truist Financial and Esquire 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 Esquire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Esquire Financial.
Diversification Opportunities for Truist Financial and Esquire Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Esquire is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Esquire Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esquire Financial 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 Esquire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esquire Financial has no effect on the direction of Truist Financial i.e., Truist Financial and Esquire Financial go up and down completely randomly.
Pair Corralation between Truist Financial and Esquire Financial
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Esquire Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 2.63 times less risky than Esquire Financial. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Esquire Financial Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 6,662 in Esquire Financial Holdings on August 28, 2024 and sell it today you would earn a total of 1,085 from holding Esquire Financial Holdings or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial vs. Esquire Financial Holdings
Performance |
| Timeline |
| Truist Financial |
| Esquire Financial |
Truist Financial and Esquire Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Esquire Financial
The main advantage of trading using opposite Truist Financial and Esquire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Esquire 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 Esquire Financial will offset losses from the drop in Esquire 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 |
| Esquire Financial vs. Fifth Third Bancorp | Esquire Financial vs. Zions Bancorporation | Esquire Financial vs. Huntington Bancshares Incorporated | Esquire Financial vs. Comerica |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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