Correlation Between Truist Financial and Great Southern
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Great Southern 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 Great Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Great Southern Bancorp, you can compare the effects of market volatilities on Truist Financial and Great Southern 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 Great Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Great Southern.
Diversification Opportunities for Truist Financial and Great Southern
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Great is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Great Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Southern 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 Great Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Southern Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and Great Southern go up and down completely randomly.
Pair Corralation between Truist Financial and Great Southern
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Great Southern. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 2.81 times less risky than Great Southern. The preferred stock trades about -0.15 of its potential returns per unit of risk. The Great Southern Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,645 in Great Southern Bancorp on August 26, 2024 and sell it today you would earn a total of 779.00 from holding Great Southern Bancorp or generate 13.8% 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. Great Southern Bancorp
Performance |
| Timeline |
| Truist Financial |
| Great Southern Bancorp |
Truist Financial and Great Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Great Southern
The main advantage of trading using opposite Truist Financial and Great Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Great Southern 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 Great Southern will offset losses from the drop in Great Southern's long position.| Truist Financial vs. Morgan Stanley | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp | Truist Financial vs. KeyCorp |
| Great Southern vs. First Northwest Bancorp | Great Southern vs. Community West Bancshares | Great Southern vs. First Financial Northwest | Great Southern vs. First Capital |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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