Correlation Between Huntington Bancshares and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and NMI Holdings 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 NMI Holdings 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 NMI Holdings, you can compare the effects of market volatilities on Huntington Bancshares and NMI Holdings 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 NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and NMI Holdings.
Diversification Opportunities for Huntington Bancshares and NMI Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntington and NMI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings 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 NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and NMI Holdings go up and down completely randomly.
Pair Corralation between Huntington Bancshares and NMI Holdings
Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to generate 1.1 times more return on investment than NMI Holdings. However, Huntington Bancshares is 1.1 times more volatile than NMI Holdings. It trades about 0.28 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.11 per unit of risk. If you would invest 1,437 in Huntington Bancshares Incorporated on September 1, 2024 and sell it today you would earn a total of 256.00 from holding Huntington Bancshares Incorporated or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. NMI Holdings
Performance |
| Timeline |
| Huntington Bancshares |
| NMI Holdings |
Huntington Bancshares and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and NMI Holdings
The main advantage of trading using opposite Huntington Bancshares and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, NMI Holdings 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 NMI Holdings will offset losses from the drop in NMI Holdings' long position.| Huntington Bancshares vs. Fifth Third Bancorp | Huntington Bancshares vs. Regions Financial | Huntington Bancshares vs. Superior Plus Corp | Huntington Bancshares vs. Origin Agritech |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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