Correlation Between BOK Financial and Triumph Financial

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

By analyzing existing cross correlation between BOK Financial and Triumph Financial, you can compare the effects of market volatilities on BOK Financial and Triumph 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 BOK Financial with a short position of Triumph Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOK Financial and Triumph Financial.

Diversification Opportunities for BOK Financial and Triumph Financial

0.77

Correlation Coefficient

BOK Financial  Triumph Financial

Poor diversification

The 3 months correlation between BOK and Triumph is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding BOK Financial and Triumph Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Financial and BOK 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 BOK Financial are associated (or correlated) with Triumph Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Financial has no effect on the direction of BOK Financial i.e., BOK Financial and Triumph Financial go up and down completely randomly.

Pair Corralation between BOK Financial and Triumph Financial

Given the investment horizon of 90 days BOK Financial is expected to generate 1.14 times less return on investment than Triumph Financial. But when comparing it to its historical volatility, BOK Financial is 1.22 times less risky than Triumph Financial. It trades about 0.03 of its potential returns per unit of risk. Triumph Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,807  in Triumph Financial on October 20, 2024 and sell it today you would earn a total of  268.00  from holding Triumph Financial or generate 3.04% return on investment over 90 days.

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

BOK Financial  vs.  Triumph Financial

BOK Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BOK Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, BOK Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Triumph Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Triumph Financial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BOK Financial and Triumph Financial

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

The idea behind BOK Financial and Triumph Financial 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.