Correlation Between JP Morgan and Fifth Third

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

Diversification Opportunities for JP Morgan and Fifth Third

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between JP Morgan and Fifth is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Chase 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 JP Morgan 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 JP Morgan Chase 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 JP Morgan i.e., JP Morgan and Fifth Third go up and down completely randomly.

Pair Corralation between JP Morgan and Fifth Third

Considering the 90-day investment horizon JP Morgan is expected to generate 1.91 times less return on investment than Fifth Third. In addition to that, JP Morgan is 3.18 times more volatile than Fifth Third Bancorp. It trades about 0.04 of its total potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.26 per unit of volatility. If you would invest  2,493  in Fifth Third Bancorp on May 11, 2022 and sell it today you would earn a total of  78.00  from holding Fifth Third Bancorp or generate 3.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

JP Morgan Chase  vs.  Fifth Third Bancorp

 Performance (%) 
       Timeline  
JP Morgan Chase 
JP Morgan Performance
0 of 100
Over the last 90 days JP Morgan Chase has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, JP Morgan is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

Fifth Third Bancorp 
Fifth Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Fifth Third Bancorp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Fifth Third may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Fifth Price Channel

JP Morgan and Fifth Third Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JP Morgan and Fifth Third

The main advantage of trading using opposite JP Morgan and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan 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.
The idea behind JP Morgan Chase 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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