Correlation Between Washington Federal and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both Washington Federal 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 Washington Federal and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Fulton Financial, you can compare the effects of market volatilities on Washington Federal 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 Washington Federal with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Fulton Financial.
Diversification Opportunities for Washington Federal and Fulton Financial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Washington and Fulton is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Washington Federal 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 Washington Federal 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 Washington Federal i.e., Washington Federal and Fulton Financial go up and down completely randomly.
Pair Corralation between Washington Federal and Fulton Financial
Assuming the 90 days horizon Washington Federal is expected to generate 1.51 times more return on investment than Fulton Financial. However, Washington Federal is 1.51 times more volatile than Fulton Financial. It trades about -0.12 of its potential returns per unit of risk. Fulton Financial is currently generating about -0.24 per unit of risk. If you would invest 1,726 in Washington Federal on November 5, 2024 and sell it today you would lose (55.00) from holding Washington Federal or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. Fulton Financial
Performance |
| Timeline |
| Washington Federal |
| Fulton Financial |
Washington Federal and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Fulton Financial
The main advantage of trading using opposite Washington Federal and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal 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.| Washington Federal vs. Fifth Third Bancorp | Washington Federal vs. Huntington Bancshares Incorporated | Washington Federal vs. Fifth Third Bancorp | Washington Federal vs. Fifth Third Bancorp |
| Fulton Financial vs. First Citizens BancShares | Fulton Financial vs. Fifth Third Bancorp | Fulton Financial vs. Dime Community Bancshares | Fulton Financial vs. Heartland Financial USA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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