Correlation Between Fifth Third and Citizens National
Can any of the company-specific risk be diversified away by investing in both Fifth Third and Citizens 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 Citizens 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 Citizens National Bancshares, you can compare the effects of market volatilities on Fifth Third and Citizens 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 Citizens National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Citizens National.
Diversification Opportunities for Fifth Third and Citizens National
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fifth and Citizens is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Citizens National Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens National 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 Citizens National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens National has no effect on the direction of Fifth Third i.e., Fifth Third and Citizens National go up and down completely randomly.
Pair Corralation between Fifth Third and Citizens National
Assuming the 90 days horizon Fifth Third Bancorp is expected to under-perform the Citizens National. But the preferred stock apears to be less risky and, when comparing its historical volatility, Fifth Third Bancorp is 2.83 times less risky than Citizens National. The preferred stock trades about -0.02 of its potential returns per unit of risk. The Citizens National Bancshares is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,611 in Citizens National Bancshares on August 30, 2024 and sell it today you would earn a total of 239.00 from holding Citizens National Bancshares or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Citizens National Bancshares
Performance |
| Timeline |
| Fifth Third Bancorp |
| Citizens National |
Fifth Third and Citizens National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Citizens National
The main advantage of trading using opposite Fifth Third and Citizens National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Citizens 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 Citizens National will offset losses from the drop in Citizens National's long position.The idea behind Fifth Third Bancorp and Citizens National Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Citizens National vs. PNC Financial Services | Citizens National vs. Citizens Financial Group, | Citizens National vs. Regions Financial | Citizens National vs. Fifth Third 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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