Correlation Between Fulton Financial and First Citizens
Can any of the company-specific risk be diversified away by investing in both Fulton Financial and First Citizens 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 Citizens 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 Citizens BancShares, you can compare the effects of market volatilities on Fulton Financial and First Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulton Financial and First Citizens.
Diversification Opportunities for Fulton Financial and First Citizens
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fulton and First is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fulton Financial and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Fulton Financial i.e., Fulton Financial and First Citizens go up and down completely randomly.
Pair Corralation between Fulton Financial and First Citizens
Assuming the 90 days horizon Fulton Financial is expected to generate 0.64 times more return on investment than First Citizens. However, Fulton Financial is 1.57 times less risky than First Citizens. It trades about 0.16 of its potential returns per unit of risk. First Citizens BancShares is currently generating about -0.01 per unit of risk. If you would invest 2,016 in Fulton Financial on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Fulton Financial or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulton Financial vs. First Citizens BancShares
Performance |
| Timeline |
| Fulton Financial |
| First Citizens BancShares |
Fulton Financial and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulton Financial and First Citizens
The main advantage of trading using opposite Fulton Financial and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulton Financial position performs unexpectedly, First Citizens 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 Citizens will offset losses from the drop in First Citizens' long position.| Fulton Financial vs. First Citizens BancShares | Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Dime Community Bancshares | Fulton Financial vs. Heartland Financial USA |
| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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