Correlation Between Huntington Bancshares and American Airlines
Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and American Airlines 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 Bancshares and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntington Bancshares Incorporated and American Airlines Group, you can compare the effects of market volatilities on Huntington Bancshares and American Airlines 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 Bancshares with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and American Airlines.
Diversification Opportunities for Huntington Bancshares and American Airlines
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntington and American is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Huntington 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 Huntington Bancshares Incorporated are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and American Airlines go up and down completely randomly.
Pair Corralation between Huntington Bancshares and American Airlines
Given the investment horizon of 90 days Huntington Bancshares Incorporated is expected to generate 0.67 times more return on investment than American Airlines. However, Huntington Bancshares Incorporated is 1.5 times less risky than American Airlines. It trades about 0.08 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.05 per unit of risk. If you would invest 1,290 in Huntington Bancshares Incorporated on January 26, 2024 and sell it today you would earn a total of 86.00 from holding Huntington Bancshares Incorporated or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntington Bancshares Incorpor vs. American Airlines Group
Performance |
| Timeline |
| Huntington Bancshares |
| American Airlines |
Huntington Bancshares and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Bancshares and American Airlines
The main advantage of trading using opposite Huntington Bancshares and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Bancshares position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.| Huntington Bancshares vs. Zions Bancorporation | Huntington Bancshares vs. Comerica | Huntington Bancshares vs. Western Alliance Bancorporation | Huntington Bancshares vs. US Bancorp |
| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. Spirit Airlines |
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 CEOs Directory module to screen CEOs from public companies around the world.
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