Correlation Between Fifth Third and Emclaire Financial
Can any of the company-specific risk be diversified away by investing in both Fifth Third and Emclaire Financial 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 Emclaire Financial 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 Emclaire Financial Corp, you can compare the effects of market volatilities on Fifth Third and Emclaire Financial 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 Emclaire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Emclaire Financial.
Diversification Opportunities for Fifth Third and Emclaire Financial
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fifth and Emclaire is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Emclaire Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emclaire Financial 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 Emclaire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emclaire Financial Corp has no effect on the direction of Fifth Third i.e., Fifth Third and Emclaire Financial go up and down completely randomly.
Pair Corralation between Fifth Third and Emclaire Financial
If you would invest (100.00) in Emclaire Financial Corp on January 21, 2024 and sell it today you would earn a total of 100.00 from holding Emclaire Financial Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Emclaire Financial Corp
Performance |
| Timeline |
| Fifth Third Bancorp |
| Emclaire Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fifth Third and Emclaire Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Emclaire Financial
The main advantage of trading using opposite Fifth Third and Emclaire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Emclaire Financial 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 Emclaire Financial will offset losses from the drop in Emclaire Financial's long position.The idea behind Fifth Third Bancorp and Emclaire Financial 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.| Emclaire Financial vs. NL Industries | Emclaire Financial vs. The Mosaic | Emclaire Financial vs. JBG SMITH Properties | Emclaire Financial vs. Balchem |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |