Correlation Between Fifth Third and NSTS Bancorp
Can any of the company-specific risk be diversified away by investing in both Fifth Third and NSTS Bancorp 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 NSTS Bancorp 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 NSTS Bancorp, you can compare the effects of market volatilities on Fifth Third and NSTS Bancorp 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 NSTS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and NSTS Bancorp.
Diversification Opportunities for Fifth Third and NSTS Bancorp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fifth and NSTS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and NSTS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTS Bancorp 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 NSTS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTS Bancorp has no effect on the direction of Fifth Third i.e., Fifth Third and NSTS Bancorp go up and down completely randomly.
Pair Corralation between Fifth Third and NSTS Bancorp
Given the investment horizon of 90 days Fifth Third Bancorp is expected to under-perform the NSTS Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Fifth Third Bancorp is 1.12 times less risky than NSTS Bancorp. The stock trades about -0.35 of its potential returns per unit of risk. The NSTS Bancorp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,121 in NSTS Bancorp on October 7, 2024 and sell it today you would earn a total of 79.00 from holding NSTS Bancorp or generate 7.05% 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. NSTS Bancorp
Performance |
| Timeline |
| Fifth Third Bancorp |
| NSTS Bancorp |
Fifth Third and NSTS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and NSTS Bancorp
The main advantage of trading using opposite Fifth Third and NSTS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, NSTS Bancorp 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 NSTS Bancorp will offset losses from the drop in NSTS Bancorp's long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
| NSTS Bancorp vs. Home Federal Bancorp | NSTS Bancorp vs. Magyar Bancorp | NSTS Bancorp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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