Correlation Between Fifth Third and Sberbank

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

By analyzing existing cross correlation between Fifth Third Bancorp and Sberbank Of Russia, you can compare the effects of market volatilities on Fifth Third and Sberbank 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 Sberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Sberbank.

Diversification Opportunities for Fifth Third and Sberbank

0.0

Correlation Coefficient

Fifth Third  Sberbank

Pay attention - limited upside

The 3 months correlation between Fifth and Sberbank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Sberbank Of Russia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sberbank Of Russia 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 Sberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sberbank Of Russia has no effect on the direction of Fifth Third i.e., Fifth Third and Sberbank go up and down completely randomly.

Pair Corralation between Fifth Third and Sberbank

If you would invest  2,233  in Fifth Third Bancorp on January 24, 2024 and sell it today you would earn a total of  130.00  from holding Fifth Third Bancorp or generate 5.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Fifth Third Bancorp  vs.  Sberbank Of Russia

Fifth Third Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fifth Third Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Fifth Third is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sberbank Of Russia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sberbank Of Russia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Sberbank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fifth Third and Sberbank

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

The idea behind Fifth Third Bancorp and Sberbank Of Russia 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.