Correlation Between Fifth Third and First National
Can any of the company-specific risk be diversified away by investing in both Fifth Third and First National 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 First National 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 First National Corp, you can compare the effects of market volatilities on Fifth Third and First National 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 First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and First National.
Diversification Opportunities for Fifth Third and First National
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fifth and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and First National Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Corp 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Corp has no effect on the direction of Fifth Third i.e., Fifth Third and First National go up and down completely randomly.
Pair Corralation between Fifth Third and First National
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 1.32 times more return on investment than First National. However, Fifth Third is 1.32 times more volatile than First National Corp. It trades about 0.05 of its potential returns per unit of risk. First National Corp is currently generating about 0.06 per unit of risk. If you would invest 3,167 in Fifth Third Bancorp on August 31, 2024 and sell it today you would earn a total of 1,639 from holding Fifth Third Bancorp or generate 51.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. First National Corp
Performance |
| Timeline |
| Fifth Third Bancorp |
| First National Corp |
Fifth Third and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and First National
The main advantage of trading using opposite Fifth Third and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, First National 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 First National will offset losses from the drop in First National's long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| First National vs. Home Federal Bancorp | First National vs. Lake Shore Bancorp | First National vs. Oak Valley Bancorp | First National 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.
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