Correlation Between Evans Bancorp and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both Evans Bancorp 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 Evans Bancorp and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evans Bancorp and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on Evans Bancorp 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 Evans Bancorp with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evans Bancorp and Huntington Bancshares.
Diversification Opportunities for Evans Bancorp and Huntington Bancshares
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evans and Huntington is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Evans Bancorp and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Evans Bancorp 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 Evans Bancorp 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 Evans Bancorp i.e., Evans Bancorp and Huntington Bancshares go up and down completely randomly.
Pair Corralation between Evans Bancorp and Huntington Bancshares
Given the investment horizon of 90 days Evans Bancorp is expected to generate 1.39 times less return on investment than Huntington Bancshares. But when comparing it to its historical volatility, Evans Bancorp is 1.04 times less risky than Huntington Bancshares. It trades about 0.15 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,554 in Huntington Bancshares Incorporated on August 24, 2024 and sell it today you would earn a total of 208.00 from holding Huntington Bancshares Incorporated or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evans Bancorp vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| Evans Bancorp |
| Huntington Bancshares |
Evans Bancorp and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evans Bancorp and Huntington Bancshares
The main advantage of trading using opposite Evans Bancorp and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evans Bancorp 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.| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA Bancorp |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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