Correlation Between Huntington Bancshares and Vanguard Funds

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

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

Diversification Opportunities for Huntington Bancshares and Vanguard Funds

0.95

Correlation Coefficient

Huntington Bancshares  Vanguard Funds

Almost no diversification

The 3 months correlation between Huntington and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and Vanguard Funds Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Funds Public and Huntington Bancshares 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 Huntington Bancshares Incorporated are associated (or correlated) with Vanguard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Funds Public has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and Vanguard Funds go up and down completely randomly.

Pair Corralation between Huntington Bancshares and Vanguard Funds

Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to generate 2.26 times more return on investment than Vanguard Funds. However, Huntington Bancshares is 2.26 times more volatile than Vanguard Funds Public. It trades about 0.12 of its potential returns per unit of risk. Vanguard Funds Public is currently generating about 0.18 per unit of risk. If you would invest  1,310  in Huntington Bancshares Incorporated on September 22, 2024 and sell it today you would earn a total of  210.00  from holding Huntington Bancshares Incorporated or generate 16.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Huntington Bancshares Incorpor  vs.  Vanguard Funds Public

Huntington Bancshares

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Bancshares Incorporated are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Huntington Bancshares reported solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Funds Public

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Funds Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Vanguard Funds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Huntington Bancshares and Vanguard Funds

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

The idea behind Huntington Bancshares Incorporated and Vanguard Funds Public 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.