Correlation Between Fifth Third and OptimumBank Holdings,
Can any of the company-specific risk be diversified away by investing in both Fifth Third and OptimumBank Holdings, 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 OptimumBank Holdings, 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 OptimumBank Holdings,, you can compare the effects of market volatilities on Fifth Third and OptimumBank Holdings, 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 OptimumBank Holdings,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and OptimumBank Holdings,.
Diversification Opportunities for Fifth Third and OptimumBank Holdings,
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fifth and OptimumBank is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and OptimumBank Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptimumBank Holdings, 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 OptimumBank Holdings,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptimumBank Holdings, has no effect on the direction of Fifth Third i.e., Fifth Third and OptimumBank Holdings, go up and down completely randomly.
Pair Corralation between Fifth Third and OptimumBank Holdings,
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 0.95 times more return on investment than OptimumBank Holdings,. However, Fifth Third Bancorp is 1.06 times less risky than OptimumBank Holdings,. It trades about 0.04 of its potential returns per unit of risk. OptimumBank Holdings, is currently generating about 0.02 per unit of risk. If you would invest 3,130 in Fifth Third Bancorp on October 7, 2024 and sell it today you would earn a total of 1,109 from holding Fifth Third Bancorp or generate 35.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. OptimumBank Holdings,
Performance |
| Timeline |
| Fifth Third Bancorp |
| OptimumBank Holdings, |
Fifth Third and OptimumBank Holdings, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and OptimumBank Holdings,
The main advantage of trading using opposite Fifth Third and OptimumBank Holdings, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, OptimumBank Holdings, 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 OptimumBank Holdings, will offset losses from the drop in OptimumBank Holdings,'s long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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