Correlation Between Truist Financial and Lakeland Financial
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Lakeland 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 Lakeland 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 Lakeland Financial, you can compare the effects of market volatilities on Truist Financial and Lakeland 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 Lakeland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Lakeland Financial.
Diversification Opportunities for Truist Financial and Lakeland Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Truist and Lakeland is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Lakeland Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland 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 Lakeland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Financial has no effect on the direction of Truist Financial i.e., Truist Financial and Lakeland Financial go up and down completely randomly.
Pair Corralation between Truist Financial and Lakeland Financial
Assuming the 90 days trading horizon Truist Financial is expected to generate 0.41 times more return on investment than Lakeland Financial. However, Truist Financial is 2.44 times less risky than Lakeland Financial. It trades about -0.3 of its potential returns per unit of risk. Lakeland Financial is currently generating about -0.24 per unit of risk. If you would invest 2,212 in Truist Financial on January 19, 2025 and sell it today you would lose (145.00) from holding Truist Financial or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial vs. Lakeland Financial
Performance |
| Timeline |
| Truist Financial |
| Lakeland Financial |
Truist Financial and Lakeland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Lakeland Financial
The main advantage of trading using opposite Truist Financial and Lakeland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Lakeland 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 Lakeland Financial will offset losses from the drop in Lakeland 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 |
| Lakeland Financial vs. Home Bancorp | Lakeland Financial vs. Heritage Financial | Lakeland Financial vs. First Northwest Bancorp | Lakeland Financial vs. Lake Shore 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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