Correlation Between Huntington Bancshares and United Community
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and United Community 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 United Community 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 United Community Banks,, you can compare the effects of market volatilities on Huntington Bancshares and United Community 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 United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and United Community.
Diversification Opportunities for Huntington Bancshares and United Community
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huntington and United is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and United Community Banks, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Community Banks, 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 United Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Community Banks, has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and United Community go up and down completely randomly.
Pair Corralation between Huntington Bancshares and United Community
Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to generate 0.91 times more return on investment than United Community. However, Huntington Bancshares Incorporated is 1.1 times less risky than United Community. It trades about 0.04 of its potential returns per unit of risk. United Community Banks, is currently generating about 0.01 per unit of risk. If you would invest 1,346 in Huntington Bancshares Incorporated on August 26, 2024 and sell it today you would earn a total of 443.00 from holding Huntington Bancshares Incorporated or generate 32.91% 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. United Community Banks,
Performance |
| Timeline |
| Huntington Bancshares |
| United Community Banks, |
Huntington Bancshares and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and United Community
The main advantage of trading using opposite Huntington Bancshares and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, United Community 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 United Community will offset losses from the drop in United Community's long position.| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
| United Community vs. Fifth Third Bancorp | United Community vs. Zions Bancorporation | United Community vs. Huntington Bancshares Incorporated | United Community vs. PNC Financial Services |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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