Correlation Between MAG SILVER and Huntington Bancshares

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

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

Diversification Opportunities for MAG SILVER and Huntington Bancshares

0.24

Correlation Coefficient

MAG SILVER  Huntington Bancshares

Modest diversification

The 3 months correlation between MAG and Huntington is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and MAG SILVER 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 MAG SILVER 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 MAG SILVER i.e., MAG SILVER and Huntington Bancshares go up and down completely randomly.

Pair Corralation between MAG SILVER and Huntington Bancshares

Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.75 times more return on investment than Huntington Bancshares. However, MAG SILVER is 1.75 times more volatile than Huntington Bancshares Incorporated. It trades about 0.11 of its potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about -0.12 per unit of risk. If you would invest  1,332  in MAG SILVER on December 25, 2024 and sell it today you would earn a total of  248.00  from holding MAG SILVER or generate 18.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

MAG SILVER  vs.  Huntington Bancshares Incorpor

MAG SILVER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, MAG SILVER unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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 MAG SILVER and Huntington Bancshares

The main advantage of trading using opposite MAG SILVER and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER 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 MAG SILVER 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.