Correlation Between Huntington Bancshares and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and MBT 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 MBT 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 MBT Bancshares, you can compare the effects of market volatilities on Huntington Bancshares and MBT 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 MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and MBT Bancshares.
Diversification Opportunities for Huntington Bancshares and MBT Bancshares
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huntington and MBT is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT 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 MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and MBT Bancshares go up and down completely randomly.
Pair Corralation between Huntington Bancshares and MBT Bancshares
Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to generate 4.56 times more return on investment than MBT Bancshares. However, Huntington Bancshares is 4.56 times more volatile than MBT Bancshares. It trades about 0.28 of its potential returns per unit of risk. MBT Bancshares is currently generating about 0.22 per unit of risk. If you would invest 1,540 in Huntington Bancshares Incorporated on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Huntington Bancshares Incorporated or generate 16.95% 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. MBT Bancshares
Performance |
| Timeline |
| Huntington Bancshares |
| MBT Bancshares |
Huntington Bancshares and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and MBT Bancshares
The main advantage of trading using opposite Huntington Bancshares and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, MBT 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Huntington Bancshares vs. JPMorgan Chase Co | Huntington Bancshares vs. Citigroup | Huntington Bancshares vs. Wells Fargo | Huntington Bancshares vs. Toronto Dominion Bank |
| MBT Bancshares vs. Huntington Bancshares Incorporated | MBT Bancshares vs. KeyCorp | MBT Bancshares vs. Bank of Idaho | MBT Bancshares vs. Citizens Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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