Correlation Between Truist Financial and CAIXABANK UNADR

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

By analyzing existing cross correlation between Truist Financial and CAIXABANK UNADR 13, you can compare the effects of market volatilities on Truist Financial and CAIXABANK UNADR 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 CAIXABANK UNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and CAIXABANK UNADR.

Diversification Opportunities for Truist Financial and CAIXABANK UNADR

0.1

Correlation Coefficient

Truist Financial  CAIXABANK UNADR

Average diversification

The 3 months correlation between Truist and CAIXABANK is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and CAIXABANK UNADR 13 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXABANK UNADR 13 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 CAIXABANK UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXABANK UNADR 13 has no effect on the direction of Truist Financial i.e., Truist Financial and CAIXABANK UNADR go up and down completely randomly.

Pair Corralation between Truist Financial and CAIXABANK UNADR

Assuming the 90 days horizon Truist Financial is expected to generate 1.24 times more return on investment than CAIXABANK UNADR. However, Truist Financial is 1.24 times more volatile than CAIXABANK UNADR 13. It trades about 0.1 of its potential returns per unit of risk. CAIXABANK UNADR 13 is currently generating about 0.06 per unit of risk. If you would invest  3,690  in Truist Financial on October 2, 2024 and sell it today you would earn a total of  459.00  from holding Truist Financial or generate 12.44% 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.  CAIXABANK UNADR 13

Truist Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Truist Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Truist Financial reported solid returns over the last few months and may actually be approaching a breakup point.

CAIXABANK UNADR 13

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CAIXABANK UNADR 13 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CAIXABANK UNADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Truist Financial and CAIXABANK UNADR

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

The idea behind Truist Financial and CAIXABANK UNADR 13 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.