Correlation Between Hilltop Holdings and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Hilltop Holdings 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 Hilltop Holdings and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilltop Holdings and Fifth Third Bancorp, you can compare the effects of market volatilities on Hilltop Holdings 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 Hilltop Holdings with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilltop Holdings and Fifth Third.
Diversification Opportunities for Hilltop Holdings and Fifth Third
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hilltop and Fifth is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings i.e., Hilltop Holdings and Fifth Third go up and down completely randomly.
Pair Corralation between Hilltop Holdings and Fifth Third
Considering the 90-day investment horizon Hilltop Holdings is expected to generate 4.24 times less return on investment than Fifth Third. In addition to that, Hilltop Holdings is 1.15 times more volatile than Fifth Third Bancorp. It trades about 0.03 of its total potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.13 per unit of volatility. If you would invest 3,338 in Fifth Third Bancorp on August 27, 2024 and sell it today you would earn a total of 1,452 from holding Fifth Third Bancorp or generate 43.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilltop Holdings vs. Fifth Third Bancorp
Performance |
| Timeline |
| Hilltop Holdings |
| Fifth Third Bancorp |
Hilltop Holdings and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilltop Holdings and Fifth Third
The main advantage of trading using opposite Hilltop Holdings and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilltop Holdings 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.| Hilltop Holdings vs. Fifth Third Bancorp | Hilltop Holdings vs. Zions Bancorporation | Hilltop Holdings vs. Huntington Bancshares Incorporated | Hilltop Holdings vs. PNC Financial Services |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |