Correlation Between First Citizens and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both First Citizens 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 First Citizens and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Citizens BancShares and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on First Citizens 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 First Citizens with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Citizens and Huntington Bancshares.
Diversification Opportunities for First Citizens and Huntington Bancshares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Huntington is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding First Citizens BancShares and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and First Citizens 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 First Citizens BancShares 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 First Citizens i.e., First Citizens and Huntington Bancshares go up and down completely randomly.
Pair Corralation between First Citizens and Huntington Bancshares
Assuming the 90 days horizon First Citizens is expected to generate 25.13 times less return on investment than Huntington Bancshares. In addition to that, First Citizens is 1.14 times more volatile than Huntington Bancshares Incorporated. It trades about 0.01 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.19 per unit of volatility. If you would invest 1,737 in Huntington Bancshares Incorporated on October 26, 2024 and sell it today you would earn a total of 98.00 from holding Huntington Bancshares Incorporated or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Citizens BancShares vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| First Citizens BancShares |
| Huntington Bancshares |
First Citizens and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Citizens and Huntington Bancshares
The main advantage of trading using opposite First Citizens and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Citizens 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.| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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