Correlation Between Truist Financial and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Atlanticus Holdings 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 Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Atlanticus Holdings, you can compare the effects of market volatilities on Truist Financial and Atlanticus Holdings 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 Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Atlanticus Holdings.
Diversification Opportunities for Truist Financial and Atlanticus Holdings
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Truist and Atlanticus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings 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 Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Truist Financial i.e., Truist Financial and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between Truist Financial and Atlanticus Holdings
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Atlanticus Holdings. In addition to that, Truist Financial is 1.02 times more volatile than Atlanticus Holdings. It trades about -0.07 of its total potential returns per unit of risk. Atlanticus Holdings is currently generating about 0.04 per unit of volatility. If you would invest 2,352 in Atlanticus Holdings on September 23, 2024 and sell it today you would earn a total of 25.00 from holding Atlanticus Holdings or generate 1.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Truist Financial vs. Atlanticus Holdings
Performance |
Timeline |
Truist Financial |
Atlanticus Holdings |
Truist Financial and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Truist Financial and Atlanticus Holdings
The main advantage of trading using opposite Truist Financial and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Atlanticus Holdings 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 Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.Truist Financial vs. Axos Financial | Truist Financial vs. Byline Bancorp | Truist Financial vs. KB Financial Group | Truist Financial vs. Nu Holdings |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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