Correlation Between Fifth Third and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Fifth Third and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Fifth Third and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Itau Unibanco.
Diversification Opportunities for Fifth Third and Itau Unibanco
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fifth and Itau is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Fifth Third i.e., Fifth Third and Itau Unibanco go up and down completely randomly.
Pair Corralation between Fifth Third and Itau Unibanco
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 1.06 times more return on investment than Itau Unibanco. However, Fifth Third is 1.06 times more volatile than Itau Unibanco Banco. It trades about 0.13 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about 0.0 per unit of risk. If you would invest 2,943 in Fifth Third Bancorp on August 27, 2024 and sell it today you would earn a total of 1,847 from holding Fifth Third Bancorp or generate 62.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Itau Unibanco Banco
Performance |
| Timeline |
| Fifth Third Bancorp |
| Itau Unibanco Banco |
Fifth Third and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Itau Unibanco
The main advantage of trading using opposite Fifth Third and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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