Correlation Between Fifth Third and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both Fifth Third and INTERCONT HOTELS 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 INTERCONT HOTELS 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 INTERCONT HOTELS, you can compare the effects of market volatilities on Fifth Third and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and INTERCONT HOTELS.
Diversification Opportunities for Fifth Third and INTERCONT HOTELS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fifth and INTERCONT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of Fifth Third i.e., Fifth Third and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between Fifth Third and INTERCONT HOTELS
Assuming the 90 days horizon Fifth Third Bancorp is expected to generate 0.92 times more return on investment than INTERCONT HOTELS. However, Fifth Third Bancorp is 1.08 times less risky than INTERCONT HOTELS. It trades about -0.07 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about -0.15 per unit of risk. If you would invest 4,041 in Fifth Third Bancorp on December 29, 2024 and sell it today you would lose (306.00) from holding Fifth Third Bancorp or give up 7.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Fifth Third Bancorp vs. INTERCONT HOTELS
Performance |
Timeline |
Fifth Third Bancorp |
INTERCONT HOTELS |
Fifth Third and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fifth Third and INTERCONT HOTELS
The main advantage of trading using opposite Fifth Third and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.Fifth Third vs. CHINA EDUCATION GROUP | Fifth Third vs. BROADSTNET LEADL 00025 | Fifth Third vs. Laureate Education | Fifth Third vs. TAL Education Group |
INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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