Correlation Between Fifth Third and MNB Holdings

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

Diversification Opportunities for Fifth Third and MNB Holdings

0.0

Correlation Coefficient

Fifth Third  MNB Holdings

Pay attention - limited upside

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

Pair Corralation between Fifth Third and MNB Holdings

Assuming the 90 days horizon Fifth Third Bancorp is expected to generate 0.38 times more return on investment than MNB Holdings. However, Fifth Third Bancorp is 2.63 times less risky than MNB Holdings. It trades about 0.04 of its potential returns per unit of risk. MNB Holdings Corp is currently generating about 0.01 per unit of risk. If you would invest  2,113  in Fifth Third Bancorp on December 28, 2024 and sell it today you would earn a total of  333.00  from holding Fifth Third Bancorp or generate 15.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fifth Third Bancorp  vs.  MNB Holdings Corp

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. Even with relatively invariable fundamental drivers, Fifth Third is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

MNB Holdings Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MNB Holdings Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, MNB Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fifth Third and MNB Holdings

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

The idea behind Fifth Third Bancorp and MNB Holdings Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.