Correlation Between HUNTINGTON and Wendys

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

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

Diversification Opportunities for HUNTINGTON and Wendys

0.13

Correlation Coefficient

HUNTINGTON  Wendys

Average diversification

The 3 months correlation between HUNTINGTON and Wendys is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding HUNTINGTON BANCSHARES INC and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys and HUNTINGTON 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 HUNTINGTON BANCSHARES INC are associated (or correlated) with Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of HUNTINGTON i.e., HUNTINGTON and Wendys go up and down completely randomly.

Pair Corralation between HUNTINGTON and Wendys

Assuming the 90 days trading horizon HUNTINGTON BANCSHARES INC is expected to generate 0.67 times more return on investment than Wendys. However, HUNTINGTON BANCSHARES INC is 1.49 times less risky than Wendys. It trades about 0.01 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.02 per unit of risk. If you would invest  8,233  in HUNTINGTON BANCSHARES INC on September 20, 2024 and sell it today you would earn a total of  222.00  from holding HUNTINGTON BANCSHARES INC or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.59%
Values	Daily Returns

HUNTINGTON BANCSHARES INC  vs.  The Wendys Co

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 latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUNTINGTON BANCSHARES INC investors.

The Wendys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Wendys Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Wendys is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HUNTINGTON and Wendys

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

The idea behind HUNTINGTON BANCSHARES INC and The Wendys Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.