Correlation Between Truist Financial and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Peoples Fin 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 Peoples Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Peoples Fin, you can compare the effects of market volatilities on Truist Financial and Peoples Fin 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 Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Peoples Fin.
Diversification Opportunities for Truist Financial and Peoples Fin
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Truist and Peoples is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin 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 Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of Truist Financial i.e., Truist Financial and Peoples Fin go up and down completely randomly.
Pair Corralation between Truist Financial and Peoples Fin
Assuming the 90 days trading horizon Truist Financial is expected to generate 0.73 times more return on investment than Peoples Fin. However, Truist Financial is 1.38 times less risky than Peoples Fin. It trades about 0.02 of its potential returns per unit of risk. Peoples Fin is currently generating about -0.08 per unit of risk. If you would invest 2,044 in Truist Financial on November 4, 2024 and sell it today you would earn a total of 11.00 from holding Truist Financial or generate 0.54% 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. Peoples Fin
Performance |
| Timeline |
| Truist Financial |
| Peoples Fin |
Truist Financial and Peoples Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Peoples Fin
The main advantage of trading using opposite Truist Financial and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin'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 |
| Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. Magyar Bancorp | Peoples Fin vs. Finward Bancorp | Peoples Fin vs. Community West 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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