Correlation Between Otello ASA and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Otello ASA 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 Otello ASA and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otello ASA and Fifth Third Bancorp, you can compare the effects of market volatilities on Otello ASA 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 Otello ASA with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otello ASA and Fifth Third.
Diversification Opportunities for Otello ASA and Fifth Third
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Otello and Fifth is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Otello ASA 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 Otello ASA 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 Otello ASA 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 Otello ASA i.e., Otello ASA and Fifth Third go up and down completely randomly.
Pair Corralation between Otello ASA and Fifth Third
Assuming the 90 days horizon Otello ASA is expected to generate 16.88 times less return on investment than Fifth Third. In addition to that, Otello ASA is 1.07 times more volatile than Fifth Third Bancorp. It trades about 0.0 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otello ASA vs. Fifth Third Bancorp
Performance |
| Timeline |
| Otello ASA |
| Fifth Third Bancorp |
Otello ASA and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otello ASA and Fifth Third
The main advantage of trading using opposite Otello ASA and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otello ASA 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.| Otello ASA vs. COMMERCIAL VEHICLE | Otello ASA vs. TITANIUM TRANSPORTGROUP | Otello ASA vs. INTER CARS SA | Otello ASA vs. Carsales |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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