Correlation Between VersaBank and Huntington Bancshares
Can any of the company-specific risk be diversified away by investing in both VersaBank 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 VersaBank and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on VersaBank 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 VersaBank with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Huntington Bancshares.
Diversification Opportunities for VersaBank and Huntington Bancshares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VersaBank and Huntington is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and VersaBank 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 VersaBank 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 VersaBank i.e., VersaBank and Huntington Bancshares go up and down completely randomly.
Pair Corralation between VersaBank and Huntington Bancshares
Given the investment horizon of 90 days VersaBank is expected to generate 3.58 times more return on investment than Huntington Bancshares. However, VersaBank is 3.58 times more volatile than Huntington Bancshares Incorporated. It trades about 0.43 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.02 per unit of risk. If you would invest 1,482 in VersaBank on August 30, 2024 and sell it today you would earn a total of 312.00 from holding VersaBank or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. Huntington Bancshares Incorpor
Performance |
| Timeline |
| VersaBank |
| Huntington Bancshares |
VersaBank and Huntington Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Huntington Bancshares
The main advantage of trading using opposite VersaBank and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank 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.| VersaBank vs. Mountain Commerce Bancorp | VersaBank vs. American Riviera Bank | VersaBank vs. Home Federal Bancorp | VersaBank vs. Prime Meridian Holding |
| Huntington Bancshares vs. Hurco Companies | Huntington Bancshares vs. Barrick Gold Corp | Huntington Bancshares vs. PepsiCo | Huntington Bancshares vs. Griffon |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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