Correlation Between US Bancorp and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both US 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 US 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 US Bancorp and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on US 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 US Bancorp with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Huntington Bancshares.
Diversification Opportunities for US Bancorp and Huntington Bancshares
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between USB and Huntington is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding US 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 US 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 US 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 US Bancorp i.e., US Bancorp and Huntington Bancshares go up and down completely randomly.
Pair Corralation between US Bancorp and Huntington Bancshares
Considering the 90-day investment horizon US Bancorp is expected to generate 1.37 times less return on investment than Huntington Bancshares. But when comparing it to its historical volatility, US Bancorp is 1.06 times less risky than Huntington Bancshares. It trades about 0.1 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,074 in Huntington Bancshares Incorporated on August 26, 2024 and sell it today you would earn a total of 715.00 from holding Huntington Bancshares Incorporated or generate 66.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| US Bancorp |
| Huntington Bancshares |
US Bancorp and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Huntington Bancshares
The main advantage of trading using opposite US Bancorp and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US 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.| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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