Correlation Between Goldman Sachs and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and Fifth Third Bancorp, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Fifth Third.
Diversification Opportunities for Goldman Sachs and Fifth Third
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Fifth is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group 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 Goldman Sachs 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 Goldman Sachs Group 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 Goldman Sachs i.e., Goldman Sachs and Fifth Third go up and down completely randomly.
Pair Corralation between Goldman Sachs and Fifth Third
Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 1.69 times less return on investment than Fifth Third. But when comparing it to its historical volatility, Goldman Sachs Group is 1.53 times less risky than Fifth Third. It trades about 0.08 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 2,464 in Fifth Third Bancorp on January 25, 2024 and sell it today you would earn a total of 1,242 from holding Fifth Third Bancorp or generate 50.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Group vs. Fifth Third Bancorp
Performance |
Timeline |
Goldman Sachs Group |
Fifth Third Bancorp |
Goldman Sachs and Fifth Third Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Fifth Third
The main advantage of trading using opposite Goldman Sachs and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Commodity Directory Find actively traded commodities issued by global exchanges |