Correlation Between Truist Financial and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both Truist Financial and SHF Holdings 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 SHF Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and SHF Holdings, you can compare the effects of market volatilities on Truist Financial and SHF Holdings 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 SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and SHF Holdings.
Diversification Opportunities for Truist Financial and SHF Holdings
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Truist and SHF is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF Holdings 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 SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of Truist Financial i.e., Truist Financial and SHF Holdings go up and down completely randomly.
Pair Corralation between Truist Financial and SHF Holdings
Assuming the 90 days trading horizon Truist Financial is expected to generate 0.1 times more return on investment than SHF Holdings. However, Truist Financial is 10.37 times less risky than SHF Holdings. It trades about -0.14 of its potential returns per unit of risk. SHF Holdings is currently generating about -0.42 per unit of risk. If you would invest 2,187 in Truist Financial on January 10, 2025 and sell it today you would lose (58.00) from holding Truist Financial or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Truist Financial vs. SHF Holdings
Performance |
| Timeline |
| Truist Financial |
| SHF Holdings |
Truist Financial and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and SHF Holdings
The main advantage of trading using opposite Truist Financial and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, SHF Holdings 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 SHF Holdings will offset losses from the drop in SHF Holdings' 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 |
| SHF Holdings vs. Camden National | SHF Holdings vs. Bank of Marin | SHF Holdings vs. Arrow Financial | SHF Holdings vs. Auburn National Bancorporation |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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