Correlation Between Truist Financial and BancFirst
Can any of the company-specific risk be diversified away by investing in both Truist Financial and BancFirst 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 BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and BancFirst, you can compare the effects of market volatilities on Truist Financial and BancFirst 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 BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and BancFirst.
Diversification Opportunities for Truist Financial and BancFirst
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and BancFirst is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst 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 BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Truist Financial i.e., Truist Financial and BancFirst go up and down completely randomly.
Pair Corralation between Truist Financial and BancFirst
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the BancFirst. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 3.46 times less risky than BancFirst. The preferred stock trades about -0.04 of its potential returns per unit of risk. The BancFirst is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 11,120 in BancFirst on August 27, 2024 and sell it today you would earn a total of 1,689 from holding BancFirst or generate 15.19% 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. BancFirst
Performance |
| Timeline |
| Truist Financial |
| BancFirst |
Truist Financial and BancFirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and BancFirst
The main advantage of trading using opposite Truist Financial and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, BancFirst 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 BancFirst will offset losses from the drop in BancFirst's long position.| Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. MetLife Preferred Stock |
| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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