Correlation Between Truist Financial and COSMOSTEEL HLDGS

Can any of the company-specific risk be diversified away by investing in both Truist Financial and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Truist Financial and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on Truist Financial and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and COSMOSTEEL HLDGS.

Diversification Opportunities for Truist Financial and COSMOSTEEL HLDGS

0.07

Correlation Coefficient

Truist Financial  COSMOSTEEL HLDGS

Significant diversification

The 3 months correlation between Truist and COSMOSTEEL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of Truist Financial i.e., Truist Financial and COSMOSTEEL HLDGS go up and down completely randomly.

Pair Corralation between Truist Financial and COSMOSTEEL HLDGS

Assuming the 90 days horizon Truist Financial is expected to under-perform the COSMOSTEEL HLDGS. But the stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 1.86 times less risky than COSMOSTEEL HLDGS. The stock trades about -0.05 of its potential returns per unit of risk. The COSMOSTEEL HLDGS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6.75  in COSMOSTEEL HLDGS on December 23, 2024 and sell it today you would earn a total of  1.10  from holding COSMOSTEEL HLDGS or generate 16.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Truist Financial  vs.  COSMOSTEEL HLDGS

Truist Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Truist Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Truist Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

COSMOSTEEL HLDGS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COSMOSTEEL HLDGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Truist Financial and COSMOSTEEL HLDGS

The main advantage of trading using opposite Truist Financial and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.

The idea behind Truist Financial and COSMOSTEEL HLDGS 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.