Correlation Between Constellation Brands and HUNTINGTON

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

By analyzing existing cross correlation between Constellation Brands Class and HUNTINGTON BANCSHARES INC, you can compare the effects of market volatilities on Constellation Brands and HUNTINGTON 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 Constellation Brands with a short position of HUNTINGTON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and HUNTINGTON.

Diversification Opportunities for Constellation Brands and HUNTINGTON

0.49

Correlation Coefficient

Constellation Brands  HUNTINGTON

Very weak diversification

The 3 months correlation between Constellation and HUNTINGTON is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with HUNTINGTON. 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 INC has no effect on the direction of Constellation Brands i.e., Constellation Brands and HUNTINGTON go up and down completely randomly.

Pair Corralation between Constellation Brands and HUNTINGTON

Considering the 90-day investment horizon Constellation Brands Class is expected to generate 2.23 times more return on investment than HUNTINGTON. However, Constellation Brands is 2.23 times more volatile than HUNTINGTON BANCSHARES INC. It trades about 0.01 of its potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about 0.0 per unit of risk. If you would invest  21,825  in Constellation Brands Class on October 4, 2024 and sell it today you would earn a total of  414.00  from holding Constellation Brands Class or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.97%
Values	Daily Returns

Constellation Brands Class  vs.  HUNTINGTON BANCSHARES INC

Constellation Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Constellation Brands Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

HUNTINGTON BANCSHARES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUNTINGTON BANCSHARES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUNTINGTON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Constellation Brands and HUNTINGTON

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

The idea behind Constellation Brands Class and HUNTINGTON BANCSHARES INC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.