Correlation Between Fifth Third and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both Fifth Third and CrossFirst Bankshares 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 CrossFirst Bankshares 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 CrossFirst Bankshares, you can compare the effects of market volatilities on Fifth Third and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and CrossFirst Bankshares.
Diversification Opportunities for Fifth Third and CrossFirst Bankshares
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fifth and CrossFirst is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Fifth Third i.e., Fifth Third and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between Fifth Third and CrossFirst Bankshares
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 0.92 times more return on investment than CrossFirst Bankshares. However, Fifth Third Bancorp is 1.09 times less risky than CrossFirst Bankshares. It trades about 0.06 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about 0.04 per unit of risk. If you would invest 2,954 in Fifth Third Bancorp on August 27, 2024 and sell it today you would earn a total of 1,836 from holding Fifth Third Bancorp or generate 62.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. CrossFirst Bankshares
Performance |
| Timeline |
| Fifth Third Bancorp |
| CrossFirst Bankshares |
Fifth Third and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and CrossFirst Bankshares
The main advantage of trading using opposite Fifth Third and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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