Correlation Between Huntington Bancshares and First Citizens
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and First Citizens 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 First Citizens 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 First Citizens BancShares, you can compare the effects of market volatilities on Huntington Bancshares and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and First Citizens.
Diversification Opportunities for Huntington Bancshares and First Citizens
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huntington and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and First Citizens go up and down completely randomly.
Pair Corralation between Huntington Bancshares and First Citizens
Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to generate 0.88 times more return on investment than First Citizens. However, Huntington Bancshares Incorporated is 1.14 times less risky than First Citizens. It trades about 0.19 of its potential returns per unit of risk. First Citizens BancShares is currently generating about 0.01 per unit of risk. If you would invest 1,737 in Huntington Bancshares Incorporated on October 26, 2024 and sell it today you would earn a total of 98.00 from holding Huntington Bancshares Incorporated or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. First Citizens BancShares
Performance |
| Timeline |
| Huntington Bancshares |
| First Citizens BancShares |
Huntington Bancshares and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and First Citizens
The main advantage of trading using opposite Huntington Bancshares and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Huntington Bancshares vs. Fifth Third Bancorp | Huntington Bancshares vs. Huntington Bancshares Incorporated | Huntington Bancshares vs. Washington Federal | Huntington Bancshares vs. Fifth Third Bancorp |
| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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