Correlation Between Citizens Financial and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Huntington Bancshares 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 Citizens Financial and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on Citizens Financial and Huntington Bancshares 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 Citizens Financial with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Huntington Bancshares.
Diversification Opportunities for Citizens Financial and Huntington Bancshares
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citizens and Huntington is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Citizens 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 Citizens Financial Group, are associated (or correlated) with Huntington Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Bancshares has no effect on the direction of Citizens Financial i.e., Citizens Financial and Huntington Bancshares go up and down completely randomly.
Pair Corralation between Citizens Financial and Huntington Bancshares
Considering the 90-day investment horizon Citizens Financial Group, is expected to generate 1.18 times more return on investment than Huntington Bancshares. However, Citizens Financial is 1.18 times more volatile than Huntington Bancshares Incorporated. It trades about 0.19 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.2 per unit of risk. If you would invest 4,103 in Citizens Financial Group, on August 24, 2024 and sell it today you would earn a total of 574.00 from holding Citizens Financial Group, or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group, vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| Citizens Financial Group, |
| Huntington Bancshares |
Citizens Financial and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Huntington Bancshares
The main advantage of trading using opposite Citizens Financial and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Huntington Bancshares 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 Huntington Bancshares will offset losses from the drop in Huntington Bancshares' long position.| Citizens Financial vs. PNC Financial Services | Citizens Financial vs. Regions Financial | Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Comerica |
| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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