Correlation Between Franchise and Fulton Financial

Can any of the company-specific risk be diversified away by investing in both Franchise 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 Franchise and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franchise Group and Fulton Financial, you can compare the effects of market volatilities on Franchise 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 Franchise with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Fulton Financial.

Diversification Opportunities for Franchise and Fulton Financial

0.0

Correlation Coefficient

Franchise  Fulton Financial

Pay attention - limited upside

The 3 months correlation between Franchise and Fulton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Franchise 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 Franchise Group 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 Franchise i.e., Franchise and Fulton Financial go up and down completely randomly.

Pair Corralation between Franchise and Fulton Financial

If you would invest (100.00) in Franchise Group on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Franchise Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Franchise Group  vs.  Fulton Financial

Franchise Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franchise Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Franchise is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Fulton Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulton Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fulton Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Franchise and Fulton Financial

The main advantage of trading using opposite Franchise and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise 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 Franchise Group 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.