Correlation Between Fifth Third and Eagle Fincl

By analyzing existing cross correlation between Fifth Third Bancorp and Eagle Fincl Svcs, you can compare the effects of market volatilities on Fifth Third and Eagle Fincl 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 Fifth Third with a short position of Eagle Fincl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Eagle Fincl.

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Can any of the company-specific risk be diversified away by investing in both Fifth Third and Eagle Fincl 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 Fifth Third and Eagle Fincl into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Fifth Third and Eagle Fincl

0.06
  Correlation Coefficient
Fifth Third Bancorp
Eagle Fincl Svcs

Significant diversification

The 3 months correlation between Fifth and Eagle is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Eagle Fincl Svcs in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Eagle Fincl Svcs and Fifth Third 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 Fifth Third Bancorp are associated (or correlated) with Eagle Fincl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Fincl Svcs has no effect on the direction of Fifth Third i.e., Fifth Third and Eagle Fincl go up and down completely randomly.

Pair Corralation between Fifth Third and Eagle Fincl

Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 2.85 times more return on investment than Eagle Fincl. However, Fifth Third is 2.85 times more volatile than Eagle Fincl Svcs. It trades about 0.08 of its potential returns per unit of risk. Eagle Fincl Svcs is currently generating about -0.11 per unit of risk. If you would invest  3,808  in Fifth Third Bancorp on June 24, 2021 and sell it today you would earn a total of  95.00  from holding Fifth Third Bancorp or generate 2.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fifth Third Bancorp  vs.  Eagle Fincl Svcs

 Performance (%) 
      Timeline 
Fifth Third Bancorp 
 Fifth Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Fifth Third Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fifth Third is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fifth Price Channel

Eagle Fincl Svcs 
 Eagle Performance
0 of 100
Over the last 90 days Eagle Fincl Svcs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eagle Fincl is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Eagle Price Channel

Fifth Third and Eagle Fincl Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Fifth Third and Eagle Fincl

The main advantage of trading using opposite Fifth Third and Eagle Fincl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Eagle Fincl 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 Eagle Fincl will offset losses from the drop in Eagle Fincl's long position.

Fifth Third Bancorp

Pair trading matchups for Fifth Third

The idea behind Fifth Third Bancorp and Eagle Fincl Svcs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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