Correlation Between Dow Jones and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Huntington Bancshares.
Diversification Opportunities for Dow Jones and Huntington Bancshares
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Huntington is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Huntington Bancshares go up and down completely randomly.
Pair Corralation between Dow Jones and Huntington Bancshares
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.39 times less return on investment than Huntington Bancshares. But when comparing it to its historical volatility, Dow Jones Industrial is 2.81 times less risky than Huntington Bancshares. It trades about 0.08 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Huntington Bancshares Incorporated on August 27, 2024 and sell it today you would earn a total of 462.00 from holding Huntington Bancshares Incorporated or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
Dow Jones and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Huntington Bancshares Incorporated
Pair trading matchups for Huntington Bancshares
Pair Trading with Dow Jones and Huntington Bancshares
The main advantage of trading using opposite Dow Jones and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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