Correlation Between Fifth Third and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Fifth Third and Affinity Bancshares 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 Fifth Third and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fifth Third Bancorp and Affinity Bancshares, you can compare the effects of market volatilities on Fifth Third and Affinity Bancshares 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 Fifth Third with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Affinity Bancshares.
Diversification Opportunities for Fifth Third and Affinity Bancshares
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fifth and Affinity is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Fifth Third 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 Fifth Third Bancorp are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of Fifth Third i.e., Fifth Third and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Fifth Third and Affinity Bancshares
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 0.98 times more return on investment than Affinity Bancshares. However, Fifth Third Bancorp is 1.02 times less risky than Affinity Bancshares. It trades about 0.1 of its potential returns per unit of risk. Affinity Bancshares is currently generating about 0.09 per unit of risk. If you would invest 2,527 in Fifth Third Bancorp on August 31, 2024 and sell it today you would earn a total of 2,279 from holding Fifth Third Bancorp or generate 90.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Affinity Bancshares
Performance |
| Timeline |
| Fifth Third Bancorp |
| Affinity Bancshares |
Fifth Third and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Affinity Bancshares
The main advantage of trading using opposite Fifth Third and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Affinity Bancshares 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |