Correlation Between Truist Financial and KS Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and KS 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 KS Bancorp 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 KS Bancorp, you can compare the effects of market volatilities on Truist Financial and KS 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 KS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and KS Bancorp.
Diversification Opportunities for Truist Financial and KS Bancorp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Truist and KSBI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial Corp and KS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KS 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 Corp are associated (or correlated) with KS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KS Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and KS Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and KS Bancorp
Considering the 90-day investment horizon Truist Financial Corp is expected to generate 10.98 times more return on investment than KS Bancorp. However, Truist Financial is 10.98 times more volatile than KS Bancorp. It trades about 0.21 of its potential returns per unit of risk. KS Bancorp is currently generating about -0.16 per unit of risk. If you would invest 4,261 in Truist Financial Corp on August 30, 2024 and sell it today you would earn a total of 514.00 from holding Truist Financial Corp or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial Corp vs. KS Bancorp
Performance |
| Timeline |
| Truist Financial Corp |
| KS Bancorp |
Truist Financial and KS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and KS Bancorp
The main advantage of trading using opposite Truist Financial and KS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, KS 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 KS Bancorp will offset losses from the drop in KS Bancorp's long position.| Truist Financial vs. PNC Financial Services | Truist Financial vs. KeyCorp | Truist Financial vs. Western Alliance Bancorporation | Truist Financial vs. Zions Bancorporation |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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