Correlation Between Huntington Bancshares and OceanFirst Financial

Can any of the company-specific risk be diversified away by investing in both Huntington Bancshares and OceanFirst Financial 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 OceanFirst Financial 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 OceanFirst Financial Corp, you can compare the effects of market volatilities on Huntington Bancshares and OceanFirst Financial 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 OceanFirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Bancshares and OceanFirst Financial.

Diversification Opportunities for Huntington Bancshares and OceanFirst Financial

-0.21

Correlation Coefficient

Huntington Bancshares  OceanFirst Financial

Very good diversification

The 3 months correlation between Huntington and OceanFirst is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Bancshares Incorpor and OceanFirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanFirst Financial Corp 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 OceanFirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanFirst Financial Corp has no effect on the direction of Huntington Bancshares i.e., Huntington Bancshares and OceanFirst Financial go up and down completely randomly.

Pair Corralation between Huntington Bancshares and OceanFirst Financial

Assuming the 90 days horizon Huntington Bancshares Incorporated is expected to generate 0.8 times more return on investment than OceanFirst Financial. However, Huntington Bancshares Incorporated is 1.25 times less risky than OceanFirst Financial. It trades about 0.04 of its potential returns per unit of risk. OceanFirst Financial Corp is currently generating about 0.03 per unit of risk. If you would invest  1,871  in Huntington Bancshares Incorporated on September 14, 2024 and sell it today you would earn a total of  489.00  from holding Huntington Bancshares Incorporated or generate 26.14% 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.  OceanFirst Financial Corp

Huntington Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

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

OceanFirst Financial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OceanFirst Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, OceanFirst Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Huntington Bancshares and OceanFirst Financial

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

The idea behind Huntington Bancshares Incorporated and OceanFirst Financial Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.