Correlation Between Truist Financial and Lakeland Financial

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

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

Diversification Opportunities for Truist Financial and Lakeland Financial

-0.31

Correlation Coefficient

Truist Financial  Lakeland Financial

Very good diversification

The 3 months correlation between Truist and Lakeland is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Lakeland Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Financial 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 Lakeland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Financial has no effect on the direction of Truist Financial i.e., Truist Financial and Lakeland Financial go up and down completely randomly.

Pair Corralation between Truist Financial and Lakeland Financial

Assuming the 90 days trading horizon Truist Financial is expected to generate 0.64 times more return on investment than Lakeland Financial. However, Truist Financial is 1.56 times less risky than Lakeland Financial. It trades about -0.26 of its potential returns per unit of risk. Lakeland Financial is currently generating about -0.26 per unit of risk. If you would invest  2,041  in Truist Financial on October 4, 2024 and sell it today you would lose (111.00) from holding Truist Financial or give up 5.44% of portfolio value over 90 days.

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

Truist Financial  vs.  Lakeland Financial

Truist Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Truist Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Preferred Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Lakeland Financial

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Lakeland Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Truist Financial and Lakeland Financial

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

The idea behind Truist Financial and Lakeland 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.