Correlation Between HYDROFARM HLD and Huntington Bancshares

Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD 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 HYDROFARM HLD and Huntington Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HYDROFARM HLD GRP and Huntington Bancshares Incorporated, you can compare the effects of market volatilities on HYDROFARM HLD 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 HYDROFARM HLD with a short position of Huntington Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Huntington Bancshares.

Diversification Opportunities for HYDROFARM HLD and Huntington Bancshares

0.0

Correlation Coefficient

HYDROFARM HLD  Huntington Bancshares

Pay attention - limited upside

The 3 months correlation between HYDROFARM and Huntington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and HYDROFARM HLD 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 HYDROFARM HLD GRP 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 HYDROFARM HLD i.e., HYDROFARM HLD and Huntington Bancshares go up and down completely randomly.

Pair Corralation between HYDROFARM HLD and Huntington Bancshares

If you would invest (100.00) in Huntington Bancshares Incorporated on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Huntington Bancshares Incorporated or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HYDROFARM HLD GRP  vs.  Huntington Bancshares Incorpor

HYDROFARM HLD GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HYDROFARM HLD GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HYDROFARM HLD is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Huntington Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huntington Bancshares Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Huntington Bancshares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HYDROFARM HLD and Huntington Bancshares

The main advantage of trading using opposite HYDROFARM HLD and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD 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.

The idea behind HYDROFARM HLD GRP and Huntington Bancshares Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.