Correlation Between Vanguard Funds and Fifth Third

Can any of the company-specific risk be diversified away by investing in both Vanguard Funds 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 Vanguard Funds and Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Funds Public and Fifth Third Bancorp, you can compare the effects of market volatilities on Vanguard Funds 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 Vanguard Funds with a short position of Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Funds and Fifth Third.

Diversification Opportunities for Vanguard Funds and Fifth Third

0.94

Correlation Coefficient

Vanguard Funds  Fifth Third

Almost no diversification

The 3 months correlation between Vanguard and Fifth is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Funds Public 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 Vanguard Funds 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 Vanguard Funds Public 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 Vanguard Funds i.e., Vanguard Funds and Fifth Third go up and down completely randomly.

Pair Corralation between Vanguard Funds and Fifth Third

Assuming the 90 days trading horizon Vanguard Funds is expected to generate 1.03 times less return on investment than Fifth Third. But when comparing it to its historical volatility, Vanguard Funds Public is 1.98 times less risky than Fifth Third. It trades about 0.22 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,829  in Fifth Third Bancorp on September 20, 2024 and sell it today you would earn a total of  473.00  from holding Fifth Third Bancorp or generate 12.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Vanguard Funds Public  vs.  Fifth Third Bancorp

Vanguard Funds Public

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Funds Public are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vanguard Funds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fifth Third Bancorp

Risk-Adjusted Performance

9 of 100

OK

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. Despite nearly fragile basic indicators, Fifth Third may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vanguard Funds and Fifth Third

The main advantage of trading using opposite Vanguard Funds and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Funds 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 Vanguard Funds Public 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.