Correlation Between Citizens Financial and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and Fulton Financial, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Fulton Financial.
Diversification Opportunities for Citizens Financial and Fulton Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and Fulton is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Citizens Financial 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 Citizens Financial Group, 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 Citizens Financial i.e., Citizens Financial and Fulton Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and Fulton Financial
Assuming the 90 days trading horizon Citizens Financial is expected to generate 1.34 times less return on investment than Fulton Financial. But when comparing it to its historical volatility, Citizens Financial Group, is 2.73 times less risky than Fulton Financial. It trades about 0.16 of its potential returns per unit of risk. Fulton Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,543 in Fulton Financial on August 28, 2024 and sell it today you would earn a total of 544.00 from holding Fulton Financial or generate 35.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 37.85% |
| Values | Daily Returns |
Citizens Financial Group, vs. Fulton Financial
Performance |
| Timeline |
| Citizens Financial Group, |
| Fulton Financial |
Citizens Financial and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Fulton Financial
The main advantage of trading using opposite Citizens Financial and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.| Citizens Financial vs. Axos Financial | Citizens Financial vs. Byline Bancorp | Citizens Financial vs. KB Financial Group | Citizens Financial vs. Nu Holdings |
| Fulton Financial vs. First Citizens BancShares | Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Dime Community Bancshares | Fulton Financial vs. Heartland Financial USA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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