Correlation Between Micron Technology and Huntington Bancshares

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

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

Diversification Opportunities for Micron Technology and Huntington Bancshares

0.0

Correlation Coefficient

Micron Technology  Huntington Bancshares

Pay attention - limited upside

The 3 months correlation between Micron and Huntington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Micron Technology 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 Micron Technology 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 Micron Technology i.e., Micron Technology and Huntington Bancshares go up and down completely randomly.

Pair Corralation between Micron Technology and Huntington Bancshares

Assuming the 90 days trading horizon Micron Technology is expected to under-perform the Huntington Bancshares. In addition to that, Micron Technology is 3.08 times more volatile than Huntington Bancshares Incorporated. It trades about -0.08 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about -0.2 per unit of volatility. If you would invest  1,664  in Huntington Bancshares Incorporated on October 7, 2024 and sell it today you would lose (94.00) from holding Huntington Bancshares Incorporated or give up 5.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Micron Technology  vs.  Huntington Bancshares Incorpor

Micron Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Huntington Bancshares

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Bancshares Incorporated are ranked lower than 12 (%) 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.

Pair Trading with Micron Technology and Huntington Bancshares

The main advantage of trading using opposite Micron Technology and Huntington Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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 Micron Technology 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.