Correlation Between Truist Financial and Orrstown Financial
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Orrstown 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 Orrstown 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 Orrstown Financial Services, you can compare the effects of market volatilities on Truist Financial and Orrstown 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 Orrstown Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Orrstown Financial.
Diversification Opportunities for Truist Financial and Orrstown Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Truist and Orrstown is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Orrstown Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orrstown 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 Orrstown Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orrstown Financial has no effect on the direction of Truist Financial i.e., Truist Financial and Orrstown Financial go up and down completely randomly.
Pair Corralation between Truist Financial and Orrstown Financial
Assuming the 90 days trading horizon Truist Financial is expected to generate 7.32 times less return on investment than Orrstown Financial. But when comparing it to its historical volatility, Truist Financial is 2.3 times less risky than Orrstown Financial. It trades about 0.04 of its potential returns per unit of risk. Orrstown Financial Services is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,867 in Orrstown Financial Services on August 28, 2024 and sell it today you would earn a total of 2,143 from holding Orrstown Financial Services or generate 114.78% 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. Orrstown Financial Services
Performance |
| Timeline |
| Truist Financial |
| Orrstown Financial |
Truist Financial and Orrstown Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Orrstown Financial
The main advantage of trading using opposite Truist Financial and Orrstown Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Orrstown 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 Orrstown Financial will offset losses from the drop in Orrstown Financial's long position.| Truist Financial vs. Morgan Stanley | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp |
| Orrstown Financial vs. Home Federal Bancorp | Orrstown Financial vs. LINKBANCORP | Orrstown Financial vs. Rhinebeck Bancorp | Orrstown 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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