Correlation Between Fifth Third and Meridian Bancorp
Can any of the company-specific risk be diversified away by investing in both Fifth Third and Meridian Bancorp 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 Meridian Bancorp 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 Meridian Bancorp, you can compare the effects of market volatilities on Fifth Third and Meridian Bancorp 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 Meridian Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Meridian Bancorp.
Diversification Opportunities for Fifth Third and Meridian Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fifth and Meridian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Meridian Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bancorp 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 Meridian Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bancorp has no effect on the direction of Fifth Third i.e., Fifth Third and Meridian Bancorp go up and down completely randomly.
Pair Corralation between Fifth Third and Meridian Bancorp
If you would invest 3,437 in Fifth Third Bancorp on January 19, 2024 and sell it today you would lose (15.00) from holding Fifth Third Bancorp or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Meridian Bancorp
Performance |
| Timeline |
| Fifth Third Bancorp |
| Meridian Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fifth Third and Meridian Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Meridian Bancorp
The main advantage of trading using opposite Fifth Third and Meridian Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third position performs unexpectedly, Meridian Bancorp 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 Meridian Bancorp will offset losses from the drop in Meridian Bancorp's long position.| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. New York Community | Fifth Third vs. Zions Bancorporation |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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