Correlation Between FNB Corp and Trustmark
Can any of the company-specific risk be diversified away by investing in both FNB Corp and Trustmark 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 FNB Corp and Trustmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNB Corp and Trustmark, you can compare the effects of market volatilities on FNB Corp and Trustmark 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 FNB Corp with a short position of Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNB Corp and Trustmark.
Diversification Opportunities for FNB Corp and Trustmark
Very weak diversification
The 3 months correlation between FNB and Trustmark is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark and FNB Corp 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 FNB Corp are associated (or correlated) with Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of FNB Corp i.e., FNB Corp and Trustmark go up and down completely randomly.
Pair Corralation between FNB Corp and Trustmark
Considering the 90-day investment horizon FNB Corp is expected to under-perform the Trustmark. But the stock apears to be less risky and, when comparing its historical volatility, FNB Corp is 1.09 times less risky than Trustmark. The stock trades about -0.14 of its potential returns per unit of risk. The Trustmark is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 3,667 in Trustmark on December 5, 2024 and sell it today you would lose (139.00) from holding Trustmark or give up 3.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FNB Corp vs. Trustmark
Performance |
Timeline |
FNB Corp |
Trustmark |
FNB Corp and Trustmark Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FNB Corp and Trustmark
The main advantage of trading using opposite FNB Corp and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB Corp position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.FNB Corp vs. ST Bancorp | FNB Corp vs. CrossFirst Bankshares | FNB Corp vs. Enterprise Financial Services | FNB Corp vs. The First Bancshares, |
Trustmark vs. Home Bancorp | Trustmark vs. First Business Financial | Trustmark vs. LINKBANCORP | Trustmark vs. Great Southern Bancorp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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