Correlation Between Huntington Bancshares and Truist Financial
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and Truist 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 Truist 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 Truist Financial, you can compare the effects of market volatilities on Huntington Bancshares and Truist 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 Truist Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and Truist Financial.
Diversification Opportunities for Huntington Bancshares and Truist Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huntington and Truist is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and Truist Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truist Financial 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 Truist Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truist Financial has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and Truist Financial go up and down completely randomly.
Pair Corralation between Huntington Bancshares and Truist Financial
Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to generate 1.66 times more return on investment than Truist Financial. However, Huntington Bancshares is 1.66 times more volatile than Truist Financial. It trades about 0.03 of its potential returns per unit of risk. Truist Financial is currently generating about 0.03 per unit of risk. If you would invest 1,611 in Huntington Bancshares Incorporated on September 3, 2024 and sell it today you would earn a total of 346.00 from holding Huntington Bancshares Incorporated or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. Truist Financial
Performance |
| Timeline |
| Huntington Bancshares |
| Truist Financial |
Huntington Bancshares and Truist Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and Truist Financial
The main advantage of trading using opposite Huntington Bancshares and Truist Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, Truist 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 Truist Financial will offset losses from the drop in Truist Financial's 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 |
| Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. Truist Financial | Truist Financial vs. MetLife Preferred Stock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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