Correlation Between Fifth Third and Orix Corp

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

Diversification Opportunities for Fifth Third and Orix Corp

0.64

Correlation Coefficient

Fifth Third  Orix Corp

Poor diversification

The 3 months correlation between Fifth and Orix is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Fifth Third i.e., Fifth Third and Orix Corp go up and down completely randomly.

Pair Corralation between Fifth Third and Orix Corp

Assuming the 90 days horizon Fifth Third is expected to generate 3.76 times less return on investment than Orix Corp. But when comparing it to its historical volatility, Fifth Third Bancorp is 4.87 times less risky than Orix Corp. It trades about 0.2 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,021  in Orix Corp Ads on May 3, 2025 and sell it today you would earn a total of  234.00  from holding Orix Corp Ads or generate 11.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Fifth Third Bancorp  vs.  Orix Corp Ads

Fifth Third Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fifth Third Bancorp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Fifth Third is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Orix Corp Ads

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Orix Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Fifth Third and Orix Corp

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

The idea behind Fifth Third Bancorp and Orix Corp Ads 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.