Correlation Between Fifth Third and China Everbright
Can any of the company-specific risk be diversified away by investing in both Fifth Third and China Everbright 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 China Everbright 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 China Everbright Bank, you can compare the effects of market volatilities on Fifth Third and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and China Everbright.
Diversification Opportunities for Fifth Third and China Everbright
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fifth and China is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Fifth Third i.e., Fifth Third and China Everbright go up and down completely randomly.
Pair Corralation between Fifth Third and China Everbright
If you would invest 4,405 in Fifth Third Bancorp on August 27, 2024 and sell it today you would earn a total of 439.00 from holding Fifth Third Bancorp or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. China Everbright Bank
Performance |
| Timeline |
| Fifth Third Bancorp |
| China Everbright Bank |
Fifth Third and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and China Everbright
The main advantage of trading using opposite Fifth Third and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| China Everbright vs. China Merchants Bank | China Everbright vs. China Merchants Bank | China Everbright vs. Postal Savings Bank | China Everbright vs. China Citic Bank |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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