Correlation Between Huntington Bancshares and MetroCity Bankshares
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and MetroCity Bankshares 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 MetroCity Bankshares 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 MetroCity Bankshares, you can compare the effects of market volatilities on Huntington Bancshares and MetroCity Bankshares 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 MetroCity Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and MetroCity Bankshares.
Diversification Opportunities for Huntington Bancshares and MetroCity Bankshares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huntington and MetroCity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and MetroCity Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetroCity Bankshares 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 MetroCity Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetroCity Bankshares has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and MetroCity Bankshares go up and down completely randomly.
Pair Corralation between Huntington Bancshares and MetroCity Bankshares
Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to under-perform the MetroCity Bankshares. But the stock apears to be less risky and, when comparing its historical volatility, Huntington Bancshares Incorporated is 1.06 times less risky than MetroCity Bankshares. The stock trades about -0.3 of its potential returns per unit of risk. The MetroCity Bankshares is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 3,039 in MetroCity Bankshares on December 5, 2024 and sell it today you would lose (172.00) from holding MetroCity Bankshares or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. MetroCity Bankshares
Performance |
| Timeline |
| Huntington Bancshares |
| MetroCity Bankshares |
Huntington Bancshares and MetroCity Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and MetroCity Bankshares
The main advantage of trading using opposite Huntington Bancshares and MetroCity Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, MetroCity Bankshares 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 MetroCity Bankshares will offset losses from the drop in MetroCity Bankshares' long position.| Huntington Bancshares vs. Zions Bancorporation | ||
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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