Correlation Between Fulton Financial and First Commonwealth
Can any of the company-specific risk be diversified away by investing in both Fulton Financial and First Commonwealth 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 First Commonwealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulton Financial and First Commonwealth Financial, you can compare the effects of market volatilities on Fulton Financial and First Commonwealth 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 First Commonwealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulton Financial and First Commonwealth.
Diversification Opportunities for Fulton Financial and First Commonwealth
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fulton and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fulton Financial and First Commonwealth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Commonwealth 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 First Commonwealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Commonwealth has no effect on the direction of Fulton Financial i.e., Fulton Financial and First Commonwealth go up and down completely randomly.
Pair Corralation between Fulton Financial and First Commonwealth
Given the investment horizon of 90 days Fulton Financial is expected to generate 1.0 times more return on investment than First Commonwealth. However, Fulton Financial is 1.0 times less risky than First Commonwealth. It trades about 0.25 of its potential returns per unit of risk. First Commonwealth Financial is currently generating about 0.18 per unit of risk. If you would invest 1,817 in Fulton Financial on August 27, 2024 and sell it today you would earn a total of 382.00 from holding Fulton Financial or generate 21.02% 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. First Commonwealth Financial
Performance |
| Timeline |
| Fulton Financial |
| First Commonwealth |
Fulton Financial and First Commonwealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulton Financial and First Commonwealth
The main advantage of trading using opposite Fulton Financial and First Commonwealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulton Financial position performs unexpectedly, First Commonwealth 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 First Commonwealth will offset losses from the drop in First Commonwealth's long position.| Fulton Financial vs. First Commonwealth Financial | Fulton Financial vs. Heritage Commerce Corp | Fulton Financial vs. Northwest Bancshares | Fulton Financial vs. First United |
| First Commonwealth vs. Fifth Third Bancorp | First Commonwealth vs. Zions Bancorporation | First Commonwealth vs. Huntington Bancshares Incorporated | First Commonwealth vs. Comerica |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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