Correlation Between Heritage Financial and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Heritage Financial and Fifth Third 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 Heritage Financial and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Financial and Fifth Third Bancorp, you can compare the effects of market volatilities on Heritage Financial and Fifth Third 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 Heritage Financial with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Financial and Fifth Third.
Diversification Opportunities for Heritage Financial and Fifth Third
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heritage and Fifth is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Financial and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp and Heritage Financial 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 Heritage Financial are associated (or correlated) with Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Heritage Financial i.e., Heritage Financial and Fifth Third go up and down completely randomly.
Pair Corralation between Heritage Financial and Fifth Third
Given the investment horizon of 90 days Heritage Financial is expected to generate 1.21 times less return on investment than Fifth Third. In addition to that, Heritage Financial is 1.19 times more volatile than Fifth Third Bancorp. It trades about 0.07 of its total potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 2,527 in Fifth Third Bancorp on August 31, 2024 and sell it today you would earn a total of 2,279 from holding Fifth Third Bancorp or generate 90.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Financial vs. Fifth Third Bancorp
Performance |
| Timeline |
| Heritage Financial |
| Fifth Third Bancorp |
Heritage Financial and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Financial and Fifth Third
The main advantage of trading using opposite Heritage Financial and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Financial position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Heritage Financial vs. Heritage Commerce Corp | Heritage Financial vs. Horizon Bancorp | Heritage Financial vs. Heartland Financial USA | Heritage Financial vs. Independent Bank |
| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
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.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |