Correlation Between Truist Financial and First Mid
Can any of the company-specific risk be diversified away by investing in both Truist Financial and First Mid 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 First Mid 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 First Mid Illinois, you can compare the effects of market volatilities on Truist Financial and First Mid 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 First Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and First Mid.
Diversification Opportunities for Truist Financial and First Mid
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Truist and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial Corp and First Mid Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mid Illinois 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 First Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mid Illinois has no effect on the direction of Truist Financial i.e., Truist Financial and First Mid go up and down completely randomly.
Pair Corralation between Truist Financial and First Mid
Considering the 90-day investment horizon Truist Financial is expected to generate 1.29 times less return on investment than First Mid. In addition to that, Truist Financial is 1.2 times more volatile than First Mid Illinois. It trades about 0.03 of its total potential returns per unit of risk. First Mid Illinois is currently generating about 0.04 per unit of volatility. If you would invest 3,032 in First Mid Illinois on September 14, 2024 and sell it today you would earn a total of 1,095 from holding First Mid Illinois or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Truist Financial Corp vs. First Mid Illinois
Performance |
| Timeline |
| Truist Financial Corp |
| First Mid Illinois |
Truist Financial and First Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and First Mid
The main advantage of trading using opposite Truist Financial and First Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, First Mid 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 First Mid will offset losses from the drop in First Mid's long position.| Truist Financial vs. Comerica | Truist Financial vs. Fifth Third Bancorp | Truist Financial vs. Zions Bancorporation | Truist Financial vs. PNC Financial Services |
| First Mid vs. Comerica | First Mid vs. Fifth Third Bancorp | First Mid vs. Zions Bancorporation | First Mid vs. PNC Financial Services |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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