Correlation Between Citizens Financial and Fulton Financial

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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

CitizensFultonDiversified AwayCitizensFultonDiversified Away100%
-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Citizens and Fulton is -0.15. 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 Group, is expected to under-perform the Fulton Financial. But the stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group, is 1.49 times less risky than Fulton Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Fulton Financial is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,948  in Fulton Financial on November 30, 2024 and sell it today you would earn a total of  90.00  from holding Fulton Financial or generate 4.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Citizens Financial Group,  vs.  Fulton Financial

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20246
JavaScript chart by amCharts 3.21.15CFG-PH FULTP
       Timeline  
Citizens Financial Group, 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Citizens Financial Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.625.82626.226.426.626.82727.2
Fulton Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Fulton Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fulton Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb19.219.419.619.82020.220.420.620.821

Citizens Financial and Fulton Financial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.27-1.69-1.11-0.530.01930.581.161.742.32 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15CFG-PH FULTP
       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.
The idea behind Citizens Financial Group, and Fulton Financial 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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