Correlation Between Fulton Financial and Enterprise Financial
Can any of the company-specific risk be diversified away by investing in both Fulton Financial and Enterprise 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 Fulton Financial and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulton Financial and Enterprise Financial Services, you can compare the effects of market volatilities on Fulton Financial and Enterprise 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 Fulton Financial with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulton Financial and Enterprise Financial.
Diversification Opportunities for Fulton Financial and Enterprise Financial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fulton and Enterprise is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fulton Financial and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and Fulton 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 Fulton Financial are associated (or correlated) with Enterprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Financial has no effect on the direction of Fulton Financial i.e., Fulton Financial and Enterprise Financial go up and down completely randomly.
Pair Corralation between Fulton Financial and Enterprise Financial
Given the investment horizon of 90 days Fulton Financial is expected to generate 1.04 times more return on investment than Enterprise Financial. However, Fulton Financial is 1.04 times more volatile than Enterprise Financial Services. It trades about 0.11 of its potential returns per unit of risk. Enterprise Financial Services is currently generating about 0.07 per unit of risk. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulton Financial vs. Enterprise Financial Services
Performance |
| Timeline |
| Fulton Financial |
| Enterprise Financial |
Fulton Financial and Enterprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulton Financial and Enterprise Financial
The main advantage of trading using opposite Fulton Financial and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulton Financial position performs unexpectedly, Enterprise 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 Enterprise Financial will offset losses from the drop in Enterprise Financial's long position.| Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Huntington Bancshares Incorporated | Fulton Financial vs. MT Bank |
| Enterprise Financial vs. Fifth Third Bancorp | Enterprise Financial vs. Huntington Bancshares Incorporated | Enterprise 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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