Correlation Between Northwest Bancshares and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both Northwest Bancshares 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 Northwest Bancshares and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Bancshares and Fulton Financial, you can compare the effects of market volatilities on Northwest Bancshares 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 Northwest Bancshares with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Bancshares and Fulton Financial.
Diversification Opportunities for Northwest Bancshares and Fulton Financial
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Northwest and Fulton is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Bancshares and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Northwest Bancshares 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 Northwest Bancshares 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 Northwest Bancshares i.e., Northwest Bancshares and Fulton Financial go up and down completely randomly.
Pair Corralation between Northwest Bancshares and Fulton Financial
Given the investment horizon of 90 days Northwest Bancshares is expected to generate 1.62 times less return on investment than Fulton Financial. But when comparing it to its historical volatility, Northwest Bancshares is 1.19 times less risky than Fulton Financial. It trades about 0.18 of its potential returns per unit of risk. Fulton Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,817 in Fulton Financial on August 28, 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 | 95.45% |
| Values | Daily Returns |
Northwest Bancshares vs. Fulton Financial
Performance |
| Timeline |
| Northwest Bancshares |
| Fulton Financial |
Northwest Bancshares and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Bancshares and Fulton Financial
The main advantage of trading using opposite Northwest Bancshares and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Bancshares 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.| Northwest Bancshares vs. ST Bancorp | Northwest Bancshares vs. CrossFirst Bankshares | Northwest Bancshares vs. Enterprise Financial Services | Northwest Bancshares vs. The First Bancshares, |
| Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Huntington Bancshares Incorporated | Fulton Financial vs. Comerica | Fulton 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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