Correlation Between Citigroup and Truist Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Truist 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 Citigroup and Truist Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Truist Financial, you can compare the effects of market volatilities on Citigroup and Truist 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 Citigroup with a short position of Truist Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Truist Financial.
Diversification Opportunities for Citigroup and Truist Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Truist is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Truist Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truist Financial and Citigroup 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 Citigroup are associated (or correlated) with Truist Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truist Financial has no effect on the direction of Citigroup i.e., Citigroup and Truist Financial go up and down completely randomly.
Pair Corralation between Citigroup and Truist Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.16 times less return on investment than Truist Financial. In addition to that, Citigroup is 2.34 times more volatile than Truist Financial. It trades about 0.06 of its total potential returns per unit of risk. Truist Financial is currently generating about 0.17 per unit of volatility. If you would invest 2,055 in Truist Financial on July 20, 2025 and sell it today you would earn a total of 145.00 from holding Truist Financial or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Truist Financial
Performance |
| Timeline |
| Citigroup |
| Truist Financial |
Citigroup and Truist Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Truist Financial
The main advantage of trading using opposite Citigroup and Truist Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Truist 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 Truist Financial will offset losses from the drop in Truist Financial's long position.| Citigroup vs. Mitsubishi UFJ Financial | Citigroup vs. Royal Bank of | Citigroup vs. Bank of America | Citigroup vs. Wells Fargo |
| Truist Financial vs. US Bancorp | Truist Financial vs. Fifth Third Bancorp | Truist Financial vs. MT Bank | Truist Financial vs. KB Financial Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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