Correlation Between Farmers National and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both Farmers National 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 Farmers National and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers National Banc and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on Farmers National 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 Farmers National with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers National and Huntington Bancshares.
Diversification Opportunities for Farmers National and Huntington Bancshares
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farmers and Huntington is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Farmers National Banc and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Farmers National 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 Farmers National Banc 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 Farmers National i.e., Farmers National and Huntington Bancshares go up and down completely randomly.
Pair Corralation between Farmers National and Huntington Bancshares
Given the investment horizon of 90 days Farmers National is expected to generate 1.09 times less return on investment than Huntington Bancshares. In addition to that, Farmers National is 1.14 times more volatile than Huntington Bancshares Incorporated. It trades about 0.2 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.25 per unit of volatility. If you would invest 1,559 in Huntington Bancshares Incorporated on September 1, 2024 and sell it today you would earn a total of 242.00 from holding Huntington Bancshares Incorporated or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmers National Banc vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| Farmers National Banc |
| Huntington Bancshares |
Farmers National and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers National and Huntington Bancshares
The main advantage of trading using opposite Farmers National and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers National 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.| Farmers National vs. Affinity Bancshares | Farmers National vs. Southern California Bancorp | Farmers National vs. Auburn National Bancorporation | Farmers National vs. BayCom Corp |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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