Correlation Between Regions Financial and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Regions 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 Regions 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 Regions Financial and Fifth Third Bancorp, you can compare the effects of market volatilities on Regions 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 Regions Financial with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Fifth Third.
Diversification Opportunities for Regions Financial and Fifth Third
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Fifth is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Regions 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 Regions 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 Regions 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 Regions Financial i.e., Regions Financial and Fifth Third go up and down completely randomly.
Pair Corralation between Regions Financial and Fifth Third
Assuming the 90 days horizon Regions Financial is expected to generate 1.41 times less return on investment than Fifth Third. But when comparing it to its historical volatility, Regions Financial is 1.07 times less risky than Fifth Third. It trades about 0.07 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,292 in Fifth Third Bancorp on August 25, 2024 and sell it today you would earn a total of 2,162 from holding Fifth Third Bancorp or generate 94.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Fifth Third Bancorp
Performance |
| Timeline |
| Regions Financial |
| Fifth Third Bancorp |
Regions Financial and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Fifth Third
The main advantage of trading using opposite Regions Financial and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions 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.| Regions Financial vs. Superior Plus Corp | Regions Financial vs. NMI Holdings | Regions Financial vs. Origin Agritech | Regions Financial vs. SIVERS SEMICONDUCTORS AB |
| Fifth Third vs. Regions Financial | Fifth Third vs. Superior Plus Corp | Fifth Third vs. NMI Holdings | Fifth Third vs. Origin Agritech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |