Correlation Between Alphabet and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Fulton Financial, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Fulton Financial.
Diversification Opportunities for Alphabet and Fulton Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and Fulton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Fulton Financial go up and down completely randomly.
Pair Corralation between Alphabet and Fulton Financial
Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Fulton Financial. But the stock apears to be less risky and, when comparing its historical volatility, Alphabet Inc Class C is 2.07 times less risky than Fulton Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Fulton Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,839 in Fulton Financial on August 31, 2024 and sell it today you would earn a total of 327.00 from holding Fulton Financial or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Fulton Financial
Performance |
| Timeline |
| Alphabet Class C |
| Fulton Financial |
Alphabet and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Fulton Financial
The main advantage of trading using opposite Alphabet and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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.| Fulton Financial vs. First Commonwealth Financial | Fulton Financial vs. Heritage Commerce Corp | Fulton Financial vs. Northwest Bancshares | Fulton Financial vs. First United |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world |