Correlation Between Premier Financial and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both Premier Financial 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 Premier Financial and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Financial Corp and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on Premier Financial 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 Premier Financial with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Financial and Huntington Bancshares.
Diversification Opportunities for Premier Financial and Huntington Bancshares
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Premier and Huntington is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Premier Financial Corp and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Premier Financial 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 Premier Financial Corp 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 Premier Financial i.e., Premier Financial and Huntington Bancshares go up and down completely randomly.
Pair Corralation between Premier Financial and Huntington Bancshares
Considering the 90-day investment horizon Premier Financial is expected to generate 1.18 times less return on investment than Huntington Bancshares. In addition to that, Premier Financial is 1.26 times more volatile than Huntington Bancshares Incorporated. It trades about 0.17 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.25 per unit of volatility. If you would invest 1,559 in Huntington Bancshares Incorporated on September 1, 2024 and sell it today you would earn a total of 242.00 from holding Huntington Bancshares Incorporated or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Financial Corp vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| Premier Financial Corp |
| Huntington Bancshares |
Premier Financial and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Financial and Huntington Bancshares
The main advantage of trading using opposite Premier Financial and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Financial 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.| Premier Financial vs. Bankwell Financial Group | Premier Financial vs. Middlefield Banc | Premier Financial vs. Civista Bancshares | Premier Financial vs. Primis Financial Corp |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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