Correlation Between Truist Financial and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and ConnectOne Bancorp 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 ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and ConnectOne Bancorp, you can compare the effects of market volatilities on Truist Financial and ConnectOne Bancorp 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 ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and ConnectOne Bancorp.
Diversification Opportunities for Truist Financial and ConnectOne Bancorp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and ConnectOne is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and ConnectOne Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to generate 11.8 times less return on investment than ConnectOne Bancorp. But when comparing it to its historical volatility, Truist Financial is 1.11 times less risky than ConnectOne Bancorp. It trades about 0.01 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,791 in ConnectOne Bancorp on November 4, 2024 and sell it today you would earn a total of 501.00 from holding ConnectOne Bancorp or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial vs. ConnectOne Bancorp
Performance |
| Timeline |
| Truist Financial |
| ConnectOne Bancorp |
Truist Financial and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and ConnectOne Bancorp
The main advantage of trading using opposite Truist Financial and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, ConnectOne Bancorp 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| Truist Financial vs. Axos Financial | Truist Financial vs. Byline Bancorp | Truist Financial vs. Deutsche Bank AG | Truist Financial vs. KB Financial Group |
| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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