Correlation Between CrossFirst Bankshares and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and Fulton Financial 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 CrossFirst Bankshares and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and Fulton Financial, you can compare the effects of market volatilities on CrossFirst Bankshares and Fulton Financial 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 CrossFirst Bankshares with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and Fulton Financial.
Diversification Opportunities for CrossFirst Bankshares and Fulton Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CrossFirst and Fulton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with Fulton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulton Financial has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Fulton Financial go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and Fulton Financial
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 1.39 times less return on investment than Fulton Financial. In addition to that, CrossFirst Bankshares is 1.03 times more volatile than Fulton Financial. It trades about 0.08 of its total potential returns per unit of risk. Fulton Financial is currently generating about 0.11 per unit of volatility. If you would invest 956.00 in Fulton Financial on August 29, 2024 and sell it today you would earn a total of 1,213 from holding Fulton Financial or generate 126.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. Fulton Financial
Performance |
| Timeline |
| CrossFirst Bankshares |
| Fulton Financial |
CrossFirst Bankshares and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and Fulton Financial
The main advantage of trading using opposite CrossFirst Bankshares and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, Fulton Financial 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 Fulton Financial will offset losses from the drop in Fulton Financial's long position.| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
| Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Huntington Bancshares Incorporated | Fulton Financial vs. MT Bank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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