Correlation Between Truist Financial and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and First Bancorp 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 First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and First Bancorp, you can compare the effects of market volatilities on Truist Financial and First Bancorp 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and First Bancorp.
Diversification Opportunities for Truist Financial and First Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Truist and First is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and First Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and First Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the First Bancorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, Truist Financial is 2.17 times less risky than First Bancorp. The preferred stock trades about -0.21 of its potential returns per unit of risk. The First Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,414 in First Bancorp on May 9, 2025 and sell it today you would earn a total of 102.00 from holding First Bancorp or generate 4.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Truist Financial vs. First Bancorp
Performance |
Timeline |
Truist Financial |
First Bancorp |
Truist Financial and First Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Truist Financial and First Bancorp
The main advantage of trading using opposite Truist Financial and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, First Bancorp 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 First Bancorp will offset losses from the drop in First Bancorp's long position.Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. US Bancorp |
First Bancorp vs. Community West Bancshares | First Bancorp vs. First Community | First Bancorp vs. First United | First Bancorp vs. Greene County 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |