Correlation Between First Financial and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both First 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 First 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 First Financial Northwest and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on First 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 First Financial with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and Huntington Bancshares.
Diversification Opportunities for First Financial and Huntington Bancshares
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Huntington is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest 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 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 First Financial Northwest 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 Financial i.e., First Financial and Huntington Bancshares go up and down completely randomly.
Pair Corralation between First Financial and Huntington Bancshares
Given the investment horizon of 90 days First Financial Northwest is expected to under-perform the Huntington Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, First Financial Northwest is 2.72 times less risky than Huntington Bancshares. The stock trades about -0.01 of its potential returns per unit of risk. The Huntington Bancshares Incorporated is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,577 in Huntington Bancshares Incorporated on August 29, 2024 and sell it today you would earn a total of 237.00 from holding Huntington Bancshares Incorporated or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Financial Northwest vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| First Financial Northwest |
| Huntington Bancshares |
First Financial and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Financial and Huntington Bancshares
The main advantage of trading using opposite First Financial and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First 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.| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial vs. Community West Bancshares |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |