Correlation Between MBT Bancshares and Huntington Bancshares

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

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

Diversification Opportunities for MBT Bancshares and Huntington Bancshares

-0.41

Correlation Coefficient

MBT Bancshares  Huntington Bancshares

Very good diversification

The 3 months correlation between MBT and Huntington is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MBT Bancshares and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and MBT 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 MBT Bancshares 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 MBT Bancshares i.e., MBT Bancshares and Huntington Bancshares go up and down completely randomly.

Pair Corralation between MBT Bancshares and Huntington Bancshares

Given the investment horizon of 90 days MBT Bancshares is expected to generate 0.36 times more return on investment than Huntington Bancshares. However, MBT Bancshares is 2.8 times less risky than Huntington Bancshares. It trades about 0.12 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about -0.09 per unit of risk. If you would invest  2,000  in MBT Bancshares on December 29, 2024 and sell it today you would earn a total of  75.00  from holding MBT Bancshares or generate 3.75% return on investment over 90 days.

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

MBT Bancshares  vs.  Huntington Bancshares Incorpor

MBT Bancshares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MBT Bancshares are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, MBT Bancshares is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with MBT Bancshares and Huntington Bancshares

The main advantage of trading using opposite MBT Bancshares and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBT Bancshares 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 MBT Bancshares 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.