If you want to seal it use foam backer rod of a size that will just barely stuff in there.
How to close metal siding gaps.
Then just slide a right angle bent piece of flashing up under the upper siding and another under the bottom of the thimble and over the exposed top of the siding.
If the hole is more than a 1 4 of an inch caulk won t solve the problem.
While you probably won t.
Head to the hardware store.
How to close a gap in vinyl siding step 1.
Another option is metal step flashing.
To slide two pieces back together you ll need a zip tool.
Step away from the caulk gun.
The right profile of flashing could block off the gap and make sure any water is directed back out at the bottom.
Paint works well over it.
I keep my eyes out for anyone who might try nesting in there but other than that if your worried abou the space use caulk or expanding foam to fill the gap or the foam strips.
Correctly sized backer rod a bond breaker and properly applied sealant is the appropriate way to handle the joint between dissimilar materials with different coefficients of expansion both thermal and moisture such as wood trim and cement plaster.
Seal small cracks and gaps in your siding under 1 4 inch wide using an acrylic latex caulk.
I wouldn t worry about it honestly and i don t.
Climb the ladder and inspect the caulking between the trim and the siding looking for any.