Correlation Between Truist Financial and First Guaranty
Can any of the company-specific risk be diversified away by investing in both Truist Financial and First Guaranty 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 First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and First Guaranty Bancshares, you can compare the effects of market volatilities on Truist Financial and First Guaranty 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 First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and First Guaranty.
Diversification Opportunities for Truist Financial and First Guaranty
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Truist and First is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares 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 First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of Truist Financial i.e., Truist Financial and First Guaranty go up and down completely randomly.
Pair Corralation between Truist Financial and First Guaranty
Assuming the 90 days trading horizon Truist Financial is expected to generate 36.26 times less return on investment than First Guaranty. But when comparing it to its historical volatility, Truist Financial is 2.13 times less risky than First Guaranty. It trades about 0.04 of its potential returns per unit of risk. First Guaranty Bancshares is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 1,075 in First Guaranty Bancshares on September 1, 2024 and sell it today you would earn a total of 356.00 from holding First Guaranty Bancshares or generate 33.12% 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. First Guaranty Bancshares
Performance |
| Timeline |
| Truist Financial |
| First Guaranty Bancshares |
Truist Financial and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and First Guaranty
The main advantage of trading using opposite Truist Financial and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, First Guaranty 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 First Guaranty will offset losses from the drop in First Guaranty's long position.| Truist Financial vs. Fifth Third Bancorp | Truist Financial vs. Fifth Third Bancorp | Truist Financial vs. First Citizens BancShares | Truist Financial vs. Huntington Bancshares Incorporated |
| First Guaranty vs. Community West Bancshares | First Guaranty vs. First Northwest Bancorp | First Guaranty vs. First Financial Northwest | First Guaranty vs. Great Southern 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |