Correlation Between Truist Financial and Park National

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Park National 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 Park National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Park National, you can compare the effects of market volatilities on Truist Financial and Park National 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 Park National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Park National.

Diversification Opportunities for Truist Financial and Park National

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Truist and Park is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Park National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park National 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 Park National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park National has no effect on the direction of Truist Financial i.e., Truist Financial and Park National go up and down completely randomly.

Pair Corralation between Truist Financial and Park National

Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Park National. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 4.05 times less risky than Park National. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Park National is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  17,144  in Park National on August 27, 2024 and sell it today you would earn a total of  2,551  from holding Park National or generate 14.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Truist Financial  vs.  Park National

 Performance 
       Timeline  
Truist Financial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Truist Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Truist Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Park National 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Park National are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Park National disclosed solid returns over the last few months and may actually be approaching a breakup point.

Truist Financial and Park National Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Truist Financial and Park National

The main advantage of trading using opposite Truist Financial and Park National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Park National 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 Park National will offset losses from the drop in Park National's long position.
The idea behind Truist Financial and Park National pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Bonds Directory
Find actively traded corporate debentures issued by US companies
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Content Syndication
Quickly integrate customizable finance content to your own investment portal