Correlation Between Eagle Financial and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Eagle 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 Eagle 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 Eagle Financial Services and Fifth Third Bancorp, you can compare the effects of market volatilities on Eagle 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 Eagle Financial with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Financial and Fifth Third.
Diversification Opportunities for Eagle Financial and Fifth Third
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eagle and Fifth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Financial Services 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 Eagle 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 Eagle Financial Services 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 Eagle Financial i.e., Eagle Financial and Fifth Third go up and down completely randomly.
Pair Corralation between Eagle Financial and Fifth Third
Given the investment horizon of 90 days Eagle Financial Services is expected to under-perform the Fifth Third. But the otc stock apears to be less risky and, when comparing its historical volatility, Eagle Financial Services is 1.01 times less risky than Fifth Third. The otc stock trades about -0.01 of its potential returns per unit of risk. The Fifth Third Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,240 in Fifth Third Bancorp on January 26, 2024 and sell it today you would earn a total of 483.00 from holding Fifth Third Bancorp or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Financial Services vs. Fifth Third Bancorp
Performance |
| Timeline |
| Eagle Financial Services |
| Fifth Third Bancorp |
Eagle Financial and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Financial and Fifth Third
The main advantage of trading using opposite Eagle Financial and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle 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.| Eagle Financial vs. Stevia Nutra Corp | Eagle Financial vs. Regent Ventures | Eagle Financial vs. Element Global | Eagle Financial vs. Affiliated Resources Corp |
| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. New York Community | Fifth Third vs. Zions Bancorporation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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