Correlation Between Huntington Bancshares and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and Hercules Capital 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 Hercules Capital 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 Hercules Capital, you can compare the effects of market volatilities on Huntington Bancshares and Hercules Capital 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 Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and Hercules Capital.
Diversification Opportunities for Huntington Bancshares and Hercules Capital
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huntington and Hercules is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital 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 Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and Hercules Capital go up and down completely randomly.
Pair Corralation between Huntington Bancshares and Hercules Capital
Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to under-perform the Hercules Capital. In addition to that, Huntington Bancshares is 1.28 times more volatile than Hercules Capital. It trades about -0.31 of its total potential returns per unit of risk. Hercules Capital is currently generating about 0.08 per unit of volatility. If you would invest 1,801 in Hercules Capital on September 25, 2024 and sell it today you would earn a total of 33.00 from holding Hercules Capital or generate 1.83% 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. Hercules Capital
Performance |
| Timeline |
| Huntington Bancshares |
| Hercules Capital |
Huntington Bancshares and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and Hercules Capital
The main advantage of trading using opposite Huntington Bancshares and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Huntington Bancshares vs. The PNC Financial | Huntington Bancshares vs. MT Bank Corp | Huntington Bancshares vs. Regions Financial | Huntington Bancshares vs. Citizens Financial Group |
| Hercules Capital vs. HEMISPHERE EGY | Hercules Capital vs. Spirent Communications plc | Hercules Capital vs. Sixt Leasing SE | Hercules Capital vs. United Internet AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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