Correlation Between Fifth Third and CBOA Financial
Can any of the company-specific risk be diversified away by investing in both Fifth Third and CBOA Financial 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 CBOA Financial 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 CBOA Financial, you can compare the effects of market volatilities on Fifth Third and CBOA Financial 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 CBOA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and CBOA Financial.
Diversification Opportunities for Fifth Third and CBOA Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fifth and CBOA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and CBOA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBOA Financial 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 CBOA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBOA Financial has no effect on the direction of Fifth Third i.e., Fifth Third and CBOA Financial go up and down completely randomly.
Pair Corralation between Fifth Third and CBOA Financial
Assuming the 90 days horizon Fifth Third Bancorp is expected to generate 0.38 times more return on investment than CBOA Financial. However, Fifth Third Bancorp is 2.6 times less risky than CBOA Financial. It trades about 0.04 of its potential returns per unit of risk. CBOA Financial is currently generating about -0.04 per unit of risk. If you would invest 2,045 in Fifth Third Bancorp on August 29, 2024 and sell it today you would earn a total of 448.00 from holding Fifth Third Bancorp or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.25% |
| Values | Daily Returns |
Fifth Third Bancorp vs. CBOA Financial
Performance |
| Timeline |
| Fifth Third Bancorp |
| CBOA Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fifth Third and CBOA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and CBOA Financial
The main advantage of trading using opposite Fifth Third and CBOA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, CBOA Financial 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 CBOA Financial will offset losses from the drop in CBOA Financial's long position.| Fifth Third vs. Fifth Third Bancorp | Fifth Third vs. Fifth Third Bancorp | Fifth Third vs. First Citizens BancShares | Fifth Third vs. Huntington Bancshares Incorporated |
| CBOA Financial vs. Pioneer Bankcorp | CBOA Financial vs. Liberty Northwest Bancorp | CBOA Financial vs. First Community | CBOA Financial vs. Coeur dAlene Bancorp |
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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