Correlation Between Huntington Bancshares and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and Citizens 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 Citizens 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 Citizens Financial Group, you can compare the effects of market volatilities on Huntington Bancshares and Citizens 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and Citizens Financial.
Diversification Opportunities for Huntington Bancshares and Citizens Financial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huntington and Citizens is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and Citizens Financial go up and down completely randomly.
Pair Corralation between Huntington Bancshares and Citizens Financial
Assuming the 90 days horizon Huntington Bancshares is expected to generate 1.09 times less return on investment than Citizens Financial. In addition to that, Huntington Bancshares is 1.02 times more volatile than Citizens Financial Group. It trades about 0.13 of its total potential returns per unit of risk. Citizens Financial Group is currently generating about 0.15 per unit of volatility. If you would invest 3,179 in Citizens Financial Group on August 25, 2024 and sell it today you would earn a total of 1,264 from holding Citizens Financial Group or generate 39.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. Citizens Financial Group
Performance |
| Timeline |
| Huntington Bancshares |
| Citizens Financial |
Huntington Bancshares and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and Citizens Financial
The main advantage of trading using opposite Huntington Bancshares and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Huntington Bancshares vs. Regions Financial | Huntington Bancshares vs. Superior Plus Corp | Huntington Bancshares vs. NMI Holdings | Huntington Bancshares vs. Origin Agritech |
| Citizens Financial vs. Regions Financial | Citizens Financial vs. Superior Plus Corp | Citizens Financial vs. NMI Holdings | Citizens Financial vs. Origin Agritech |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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