Correlation Between Truist Financial and Citizens Community
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Citizens Community 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 Citizens Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial Corp and Citizens Community Bancorp, you can compare the effects of market volatilities on Truist Financial and Citizens Community 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 Citizens Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Citizens Community.
Diversification Opportunities for Truist Financial and Citizens Community
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Truist and Citizens is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial Corp and Citizens Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Community 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 Corp are associated (or correlated) with Citizens Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Community has no effect on the direction of Truist Financial i.e., Truist Financial and Citizens Community go up and down completely randomly.
Pair Corralation between Truist Financial and Citizens Community
Considering the 90-day investment horizon Truist Financial Corp is expected to generate 1.59 times more return on investment than Citizens Community. However, Truist Financial is 1.59 times more volatile than Citizens Community Bancorp. It trades about 0.0 of its potential returns per unit of risk. Citizens Community Bancorp is currently generating about -0.13 per unit of risk. If you would invest 4,570 in Truist Financial Corp on December 4, 2024 and sell it today you would lose (27.00) from holding Truist Financial Corp or give up 0.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Truist Financial Corp vs. Citizens Community Bancorp
Performance |
Timeline |
Truist Financial Corp |
Citizens Community |
Truist Financial and Citizens Community Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Truist Financial and Citizens Community
The main advantage of trading using opposite Truist Financial and Citizens Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Citizens Community 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 Citizens Community will offset losses from the drop in Citizens Community's long position.Truist Financial vs. PNC Financial Services | Truist Financial vs. KeyCorp | Truist Financial vs. Western Alliance Bancorporation | Truist Financial vs. Zions Bancorporation |
Citizens Community vs. Home Federal Bancorp | Citizens Community vs. First Financial Northwest | Citizens Community vs. First Northwest Bancorp | Citizens Community vs. First Capital |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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