Correlation Between Truist Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Citizens Financial 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 Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial Corp and Citizens Financial Group,, you can compare the effects of market volatilities on Truist Financial and Citizens Financial 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Citizens Financial.
Diversification Opportunities for Truist Financial and Citizens Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Truist and Citizens is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial Corp and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Corp are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Truist Financial i.e., Truist Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between Truist Financial and Citizens Financial
Considering the 90-day investment horizon Truist Financial Corp is expected to generate 0.85 times more return on investment than Citizens Financial. However, Truist Financial Corp is 1.18 times less risky than Citizens Financial. It trades about -0.15 of its potential returns per unit of risk. Citizens Financial Group, is currently generating about -0.2 per unit of risk. If you would invest 4,708 in Truist Financial Corp on November 27, 2024 and sell it today you would lose (174.00) from holding Truist Financial Corp or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial Corp vs. Citizens Financial Group,
Performance |
| Timeline |
| Truist Financial Corp |
| Citizens Financial Group, |
Truist Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Citizens Financial
The main advantage of trading using opposite Truist Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Citizens Financial 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Truist Financial vs. PNC Financial Services | Truist Financial vs. KeyCorp | Truist Financial vs. Western Alliance Bancorporation | Truist Financial vs. Zions Bancorporation |
| Citizens Financial vs. PNC Financial Services | Citizens Financial vs. Regions Financial | Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Comerica |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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