Correlation Between First Republic and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both First Republic 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 Republic 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 Republic Bank and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on First Republic 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 Republic with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Huntington Bancshares.
Diversification Opportunities for First Republic and Huntington Bancshares
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Huntington is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank 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 Republic 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 Republic Bank 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 Republic i.e., First Republic and Huntington Bancshares go up and down completely randomly.
Pair Corralation between First Republic and Huntington Bancshares
If you would invest 1,577 in Huntington Bancshares Incorporated on August 27, 2024 and sell it today you would earn a total of 212.00 from holding Huntington Bancshares Incorporated or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Republic Bank vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huntington Bancshares |
First Republic and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Huntington Bancshares
The main advantage of trading using opposite First Republic and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic 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 Republic vs. Noble plc | First Republic vs. Nabors Industries | First Republic vs. Tenaris SA ADR | First Republic vs. The Cheesecake Factory |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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