Correlation Between Biglari Holdings and HUNTINGTON

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

By analyzing existing cross correlation between Biglari Holdings and HUNTINGTON BANCSHARES INC, you can compare the effects of market volatilities on Biglari Holdings and HUNTINGTON 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 Biglari Holdings with a short position of HUNTINGTON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and HUNTINGTON.

Diversification Opportunities for Biglari Holdings and HUNTINGTON

0.09

Correlation Coefficient

Biglari Holdings  HUNTINGTON

Significant diversification

The 3 months correlation between Biglari and HUNTINGTON is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with HUNTINGTON. 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 INC has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and HUNTINGTON go up and down completely randomly.

Pair Corralation between Biglari Holdings and HUNTINGTON

Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 3.02 times more return on investment than HUNTINGTON. However, Biglari Holdings is 3.02 times more volatile than HUNTINGTON BANCSHARES INC. It trades about 0.18 of its potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about -0.22 per unit of risk. If you would invest  22,418  in Biglari Holdings on October 5, 2024 and sell it today you would earn a total of  2,578  from holding Biglari Holdings or generate 11.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Biglari Holdings  vs.  HUNTINGTON BANCSHARES INC

Biglari Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

HUNTINGTON BANCSHARES INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Biglari Holdings and HUNTINGTON

The main advantage of trading using opposite Biglari Holdings and HUNTINGTON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, HUNTINGTON 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 will offset losses from the drop in HUNTINGTON's long position.

The idea behind Biglari Holdings and HUNTINGTON BANCSHARES INC 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.