Correlation Between InterContinental and Huntington Bancshares

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

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

Diversification Opportunities for InterContinental and Huntington Bancshares

0.92

Correlation Coefficient

InterContinental  Huntington Bancshares

Almost no diversification

The 3 months correlation between InterContinental and Huntington is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and InterContinental 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 InterContinental Hotels Group 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 InterContinental i.e., InterContinental and Huntington Bancshares go up and down completely randomly.

Pair Corralation between InterContinental and Huntington Bancshares

Assuming the 90 days trading horizon InterContinental Hotels Group is expected to under-perform the Huntington Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, InterContinental Hotels Group is 1.01 times less risky than Huntington Bancshares. The stock trades about -0.15 of its potential returns per unit of risk. The Huntington Bancshares Incorporated is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  1,572  in Huntington Bancshares Incorporated on December 27, 2024 and sell it today you would lose (162.00) from holding Huntington Bancshares Incorporated or give up 10.31% of portfolio value over 90 days.

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

InterContinental Hotels Group  vs.  Huntington Bancshares Incorpor

InterContinental Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days InterContinental Hotels Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Huntington Bancshares

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with InterContinental and Huntington Bancshares

The main advantage of trading using opposite InterContinental and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental 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 InterContinental Hotels Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.