Correlation Between Truist Financial and Southern California
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Southern California 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 Southern California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Southern California Bancorp, you can compare the effects of market volatilities on Truist Financial and Southern California 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 Southern California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Southern California.
Diversification Opportunities for Truist Financial and Southern California
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Truist and Southern is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Southern California Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California has no effect on the direction of Truist Financial i.e., Truist Financial and Southern California go up and down completely randomly.
Pair Corralation between Truist Financial and Southern California
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Southern California. In addition to that, Truist Financial is 1.39 times more volatile than Southern California Bancorp. It trades about -0.17 of its total potential returns per unit of risk. Southern California Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 1,731 in Southern California Bancorp on September 10, 2024 and sell it today you would earn a total of 33.00 from holding Southern California Bancorp or generate 1.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Truist Financial vs. Southern California Bancorp
Performance |
Timeline |
Truist Financial |
Southern California |
Truist Financial and Southern California Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Truist Financial and Southern California
The main advantage of trading using opposite Truist Financial and Southern California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Southern California 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 Southern California will offset losses from the drop in Southern California's long position.Truist Financial vs. US Bancorp | Truist Financial vs. Truist Financial | Truist Financial vs. MetLife Preferred Stock | Truist Financial vs. US Bancorp |
Southern California vs. Avidbank Holdings | Southern California vs. American Riviera Bank | Southern California vs. American Business Bk | Southern California vs. Private Bancorp of |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |