Correlation Between Truist Financial and Republic Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Republic 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 Republic 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 Republic Bancorp, you can compare the effects of market volatilities on Truist Financial and Republic 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 Republic Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Republic Bancorp.
Diversification Opportunities for Truist Financial and Republic Bancorp
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truist and Republic is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Republic Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic 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 Republic Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and Republic Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and Republic Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to generate 3.93 times less return on investment than Republic Bancorp. But when comparing it to its historical volatility, Truist Financial is 1.66 times less risky than Republic Bancorp. It trades about 0.03 of its potential returns per unit of risk. Republic Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,110 in Republic Bancorp on August 27, 2024 and sell it today you would earn a total of 3,652 from holding Republic Bancorp or generate 88.86% 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. Republic Bancorp
Performance |
| Timeline |
| Truist Financial |
| Republic Bancorp |
Truist Financial and Republic Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Republic Bancorp
The main advantage of trading using opposite Truist Financial and Republic Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Republic 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 Republic Bancorp will offset losses from the drop in Republic 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 |
| Republic Bancorp vs. First Community | Republic Bancorp vs. Community West Bancshares | Republic Bancorp vs. First Financial Northwest | Republic Bancorp vs. First Northwest Bancorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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