Correlation Between PacWest Bancorp and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp and Huntington Bancshares 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 PacWest Bancorp and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on PacWest Bancorp and Huntington Bancshares 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 PacWest Bancorp with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and Huntington Bancshares.
Diversification Opportunities for PacWest Bancorp and Huntington Bancshares
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PacWest and Huntington is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and PacWest Bancorp 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 PacWest Bancorp are associated (or correlated) with Huntington Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Bancshares has no effect on the direction of PacWest Bancorp i.e., PacWest Bancorp and Huntington Bancshares go up and down completely randomly.
Pair Corralation between PacWest Bancorp and Huntington Bancshares
If you would invest 1,335 in Huntington Bancshares Incorporated on August 24, 2024 and sell it today you would earn a total of 427.00 from holding Huntington Bancshares Incorporated or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
PacWest Bancorp vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huntington Bancshares |
PacWest Bancorp and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and Huntington Bancshares
The main advantage of trading using opposite PacWest Bancorp and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp position performs unexpectedly, Huntington Bancshares 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 Huntington Bancshares will offset losses from the drop in Huntington Bancshares' long position.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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