Correlation Between Fifth Third and Japan Post

Can any of the company-specific risk be diversified away by investing in both Fifth Third and Japan Post 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 Japan Post 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 Japan Post Holdings, you can compare the effects of market volatilities on Fifth Third and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Japan Post.

Diversification Opportunities for Fifth Third and Japan Post

0.0

Correlation Coefficient

Fifth Third  Japan Post

Pay attention - limited upside

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

Pair Corralation between Fifth Third and Japan Post

If you would invest (100.00) in Japan Post Holdings on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Japan Post Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fifth Third Bancorp  vs.  Japan Post Holdings

Fifth Third Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fifth Third Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Japan Post Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Japan Post Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Japan Post is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fifth Third and Japan Post

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

The idea behind Fifth Third Bancorp and Japan Post Holdings 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 CEOs Directory module to screen CEOs from public companies around the world.