Correlation Between Truist Financial and International Bancshares
Can any of the company-specific risk be diversified away by investing in both Truist Financial and International Bancshares 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 International Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and International Bancshares, you can compare the effects of market volatilities on Truist Financial and International Bancshares 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 International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and International Bancshares.
Diversification Opportunities for Truist Financial and International Bancshares
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and International is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Bancshares 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 International Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Bancshares has no effect on the direction of Truist Financial i.e., Truist Financial and International Bancshares go up and down completely randomly.
Pair Corralation between Truist Financial and International Bancshares
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the International Bancshares. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 3.35 times less risky than International Bancshares. The preferred stock trades about -0.04 of its potential returns per unit of risk. The International Bancshares is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 6,271 in International Bancshares on August 27, 2024 and sell it today you would earn a total of 1,240 from holding International Bancshares or generate 19.77% 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. International Bancshares
Performance |
| Timeline |
| Truist Financial |
| International Bancshares |
Truist Financial and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and International Bancshares
The main advantage of trading using opposite Truist Financial and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, International Bancshares 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 International Bancshares will offset losses from the drop in International Bancshares' long position.| Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. MetLife Preferred Stock |
| International Bancshares vs. Home Federal Bancorp | International Bancshares vs. First Financial Northwest | International Bancshares vs. First Northwest Bancorp | International Bancshares 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |