Correlation Between Huntington Bancshares and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and BCB Bancorp 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 Huntington Bancshares and BCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntington Bancshares Incorporated and BCB Bancorp, you can compare the effects of market volatilities on Huntington Bancshares and BCB Bancorp 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 Huntington Bancshares with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and BCB Bancorp.
Diversification Opportunities for Huntington Bancshares and BCB Bancorp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huntington and BCB is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and Huntington Bancshares 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 Huntington Bancshares Incorporated are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and BCB Bancorp go up and down completely randomly.
Pair Corralation between Huntington Bancshares and BCB Bancorp
Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to generate 1.41 times more return on investment than BCB Bancorp. However, Huntington Bancshares is 1.41 times more volatile than BCB Bancorp. It trades about 0.22 of its potential returns per unit of risk. BCB Bancorp is currently generating about 0.19 per unit of risk. If you would invest 1,574 in Huntington Bancshares Incorporated on August 31, 2024 and sell it today you would earn a total of 226.00 from holding Huntington Bancshares Incorporated or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. BCB Bancorp
Performance |
| Timeline |
| Huntington Bancshares |
| BCB Bancorp |
Huntington Bancshares and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and BCB Bancorp
The main advantage of trading using opposite Huntington Bancshares and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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