Correlation Between BRADESCO and Fifth Third

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both BRADESCO and Fifth Third 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 BRADESCO and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRADESCO PN EJ and Fifth Third Bancorp, you can compare the effects of market volatilities on BRADESCO and Fifth Third 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 BRADESCO with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRADESCO and Fifth Third.

Diversification Opportunities for BRADESCO and Fifth Third

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between BRADESCO and Fifth is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BRADESCO PN EJ N1 and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp and BRADESCO 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 BRADESCO PN EJ are associated (or correlated) with Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of BRADESCO i.e., BRADESCO and Fifth Third go up and down completely randomly.

Pair Corralation between BRADESCO and Fifth Third

Assuming the 90 days trading horizon BRADESCO PN EJ is expected to generate 3.25 times more return on investment than Fifth Third. However, BRADESCO is 3.25 times more volatile than Fifth Third Bancorp. It trades about 0.02 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.02 per unit of risk. If you would invest  1,627  in BRADESCO PN EJ on April 2, 2022 and sell it today you would earn a total of  93.00  from holding BRADESCO PN EJ or generate 5.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.39%
ValuesDaily Returns

BRADESCO PN EJ N1  vs.  Fifth Third Bancorp

 Performance (%) 
      Timeline 
BRADESCO PN EJ 
BRADESCO Performance
0 of 100
Over the last 90 days BRADESCO PN EJ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BRADESCO Price Channel

Fifth Third Bancorp 
Fifth Performance
0 of 100
Over the last 90 days Fifth Third Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Fifth Third is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0612
Payout Ratio
0.0155
Forward Annual Dividend Rate
1.5
Dividend Date
2022-03-31
Ex Dividend Date
2022-06-27

Fifth Price Channel

BRADESCO and Fifth Third Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BRADESCO and Fifth Third

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

BRADESCO PN EJ

Pair trading matchups for BRADESCO

The idea behind BRADESCO PN EJ and Fifth Third Bancorp 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.

Fifth Third Bancorp

Pair trading matchups for Fifth Third

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go