Correlation Between Huntington Bancshares and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and HomeTrust 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 Huntington Bancshares and HomeTrust Bancshares 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 HomeTrust Bancshares, you can compare the effects of market volatilities on Huntington Bancshares and HomeTrust 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 Huntington Bancshares with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and HomeTrust Bancshares.
Diversification Opportunities for Huntington Bancshares and HomeTrust Bancshares
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huntington and HomeTrust is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares 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 HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between Huntington Bancshares and HomeTrust Bancshares
Given the investment horizon of 90 days Huntington Bancshares is expected to generate 1.48 times less return on investment than HomeTrust Bancshares. But when comparing it to its historical volatility, Huntington Bancshares Incorporated is 1.06 times less risky than HomeTrust Bancshares. It trades about 0.03 of its potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,322 in HomeTrust Bancshares on October 13, 2024 and sell it today you would earn a total of 838.00 from holding HomeTrust Bancshares or generate 36.09% 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. HomeTrust Bancshares
Performance |
| Timeline |
| Huntington Bancshares |
| HomeTrust Bancshares |
Huntington Bancshares and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and HomeTrust Bancshares
The main advantage of trading using opposite Huntington Bancshares and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, HomeTrust 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 HomeTrust Bancshares will offset losses from the drop in HomeTrust Bancshares' long position.| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
| HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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