Correlation Between Truist Financial and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Customers 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 Customers 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 Customers Bancorp, you can compare the effects of market volatilities on Truist Financial and Customers 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 Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Customers Bancorp.
Diversification Opportunities for Truist Financial and Customers Bancorp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Customers is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers 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 Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and Customers Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and Customers Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to generate 1.57 times less return on investment than Customers Bancorp. But when comparing it to its historical volatility, Truist Financial is 1.36 times less risky than Customers Bancorp. It trades about 0.03 of its potential returns per unit of risk. Customers Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,103 in Customers Bancorp on August 27, 2024 and sell it today you would earn a total of 522.00 from holding Customers Bancorp or generate 24.82% 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. Customers Bancorp
Performance |
| Timeline |
| Truist Financial |
| Customers Bancorp |
Truist Financial and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Customers Bancorp
The main advantage of trading using opposite Truist Financial and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Customers 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. MetLife Preferred Stock |
| Customers Bancorp vs. Tectonic Financial PR | Customers Bancorp vs. First Guaranty Bancshares | Customers Bancorp vs. First Merchants | Customers Bancorp vs. Metropolitan Bank Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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