Correlation Between Huntington Bancshares and International Bancshares
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and International 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 International 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 International Bancshares, you can compare the effects of market volatilities on Huntington Bancshares and International 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 International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and International Bancshares.
Diversification Opportunities for Huntington Bancshares and International Bancshares
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huntington and International is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International 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 International Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Bancshares has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and International Bancshares go up and down completely randomly.
Pair Corralation between Huntington Bancshares and International Bancshares
Assuming the 90 days horizon Huntington Bancshares is expected to generate 2.73 times less return on investment than International Bancshares. But when comparing it to its historical volatility, Huntington Bancshares Incorporated is 1.42 times less risky than International Bancshares. It trades about 0.03 of its potential returns per unit of risk. International Bancshares is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,333 in International Bancshares on September 12, 2024 and sell it today you would earn a total of 2,717 from holding International Bancshares or generate 62.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.11% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. International Bancshares
Performance |
| Timeline |
| Huntington Bancshares |
| International Bancshares |
Huntington Bancshares and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and International Bancshares
The main advantage of trading using opposite Huntington Bancshares and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, International 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 International Bancshares will offset losses from the drop in International Bancshares' long position.| Huntington Bancshares vs. Electrovaya Common Shares | Huntington Bancshares vs. Chester Mining | Huntington Bancshares vs. Ecovyst | Huntington Bancshares vs. Hawkins |
| International Bancshares vs. JPMorgan Chase Co | International Bancshares vs. Citigroup | International Bancshares vs. Wells Fargo | International Bancshares vs. Toronto Dominion Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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