Correlation Between Truist Financial and Guaranty Bancshares,

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

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

Diversification Opportunities for Truist Financial and Guaranty Bancshares,

0.81

Correlation Coefficient

Truist Financial  Guaranty Bancshares,

Very poor diversification

The 3 months correlation between Truist and Guaranty is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Guaranty Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Bancshares, 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 Guaranty Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Bancshares, has no effect on the direction of Truist Financial i.e., Truist Financial and Guaranty Bancshares, go up and down completely randomly.

Pair Corralation between Truist Financial and Guaranty Bancshares,

Assuming the 90 days trading horizon Truist Financial is expected to generate 27.12 times less return on investment than Guaranty Bancshares,. But when comparing it to its historical volatility, Truist Financial is 2.24 times less risky than Guaranty Bancshares,. It trades about 0.01 of its potential returns per unit of risk. Guaranty Bancshares, is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,878  in Guaranty Bancshares, on December 7, 2024 and sell it today you would earn a total of  1,114  from holding Guaranty Bancshares, or generate 38.71% return on investment over 90 days.

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

Truist Financial  vs.  Guaranty Bancshares,

Truist Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Truist Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Truist Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Guaranty Bancshares,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Guaranty Bancshares, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Truist Financial and Guaranty Bancshares,

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

The idea behind Truist Financial and Guaranty Bancshares, 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.