Correlation Between Huntington Bancshares and Premier Financial

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Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and Premier Financial 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 Premier Financial 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 Premier Financial Corp, you can compare the effects of market volatilities on Huntington Bancshares and Premier Financial 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 Premier Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and Premier Financial.

Diversification Opportunities for Huntington Bancshares and Premier Financial

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Huntington and Premier is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and Premier Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Financial Corp 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 Premier Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Financial Corp has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and Premier Financial go up and down completely randomly.

Pair Corralation between Huntington Bancshares and Premier Financial

Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to generate 0.8 times more return on investment than Premier Financial. However, Huntington Bancshares Incorporated is 1.26 times less risky than Premier Financial. It trades about 0.25 of its potential returns per unit of risk. Premier Financial Corp is currently generating about 0.17 per unit of risk. If you would invest  1,559  in Huntington Bancshares Incorporated on September 1, 2024 and sell it today you would earn a total of  242.00  from holding Huntington Bancshares Incorporated or generate 15.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Huntington Bancshares Incorpor  vs.  Premier Financial Corp

 Performance 
       Timeline  
Huntington Bancshares 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Bancshares Incorporated are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Huntington Bancshares displayed solid returns over the last few months and may actually be approaching a breakup point.
Premier Financial Corp 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Premier Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Premier Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Huntington Bancshares and Premier Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Huntington Bancshares and Premier Financial

The main advantage of trading using opposite Huntington Bancshares and Premier Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, Premier Financial 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 Premier Financial will offset losses from the drop in Premier Financial's long position.
The idea behind Huntington Bancshares Incorporated and Premier Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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