Correlation Between Huntington Bancshares and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and PNC 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 PNC 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 PNC Financial Services, you can compare the effects of market volatilities on Huntington Bancshares and PNC 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and PNC Financial.
Diversification Opportunities for Huntington Bancshares and PNC Financial
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Huntington and PNC is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and PNC Financial go up and down completely randomly.
Pair Corralation between Huntington Bancshares and PNC Financial
Given the investment horizon of 90 days Huntington Bancshares is expected to generate 1.21 times less return on investment than PNC Financial. In addition to that, Huntington Bancshares is 1.15 times more volatile than PNC Financial Services. It trades about 0.04 of its total potential returns per unit of risk. PNC Financial Services is currently generating about 0.06 per unit of volatility. If you would invest 13,952 in PNC Financial Services on August 27, 2024 and sell it today you would earn a total of 7,055 from holding PNC Financial Services or generate 50.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. PNC Financial Services
Performance |
| Timeline |
| Huntington Bancshares |
| PNC Financial Services |
Huntington Bancshares and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and PNC Financial
The main advantage of trading using opposite Huntington Bancshares and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, PNC 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
| PNC Financial vs. Fifth Third Bancorp | PNC Financial vs. Zions Bancorporation | PNC Financial vs. Huntington Bancshares Incorporated | PNC Financial vs. Comerica |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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