Correlation Between Lundin Energy and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Lundin Energy 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 Lundin Energy and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and Fifth Third Bancorp, you can compare the effects of market volatilities on Lundin Energy 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 Lundin Energy with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and Fifth Third.
Diversification Opportunities for Lundin Energy and Fifth Third
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Fifth is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB 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 Lundin Energy 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 Lundin Energy AB 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 Lundin Energy i.e., Lundin Energy and Fifth Third go up and down completely randomly.
Pair Corralation between Lundin Energy and Fifth Third
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the Fifth Third. In addition to that, Lundin Energy is 1.6 times more volatile than Fifth Third Bancorp. It trades about -0.04 of its total potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.04 per unit of volatility. If you would invest 3,096 in Fifth Third Bancorp on November 19, 2024 and sell it today you would earn a total of 1,047 from holding Fifth Third Bancorp or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. Fifth Third Bancorp
Performance |
| Timeline |
| Lundin Energy AB |
| Fifth Third Bancorp |
Lundin Energy and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and Fifth Third
The main advantage of trading using opposite Lundin Energy and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy 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.| Lundin Energy vs. CORNISH METALS INC | Lundin Energy vs. Western Copper and | Lundin Energy vs. Perseus Mining Limited | Lundin Energy vs. CanSino Biologics |
| Fifth Third vs. Haverty Furniture Companies | Fifth Third vs. Focus Home Interactive | Fifth Third vs. JIAHUA STORES | Fifth Third vs. SPARTAN STORES |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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