Correlation Between Zions Bancorporation and Huntington Bancshares

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

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

Diversification Opportunities for Zions Bancorporation and Huntington Bancshares

0.99

Correlation Coefficient

Zions Bancorporation  Huntington Bancshares

No risk reduction

The 3 months correlation between Zions and Huntington is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Zions Bancorporation 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 Zions Bancorporation 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 Zions Bancorporation i.e., Zions Bancorporation and Huntington Bancshares go up and down completely randomly.

Pair Corralation between Zions Bancorporation and Huntington Bancshares

Given the investment horizon of 90 days Zions Bancorporation is expected to under-perform the Huntington Bancshares. In addition to that, Zions Bancorporation is 1.05 times more volatile than Huntington Bancshares Incorporated. It trades about -0.11 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about -0.1 per unit of volatility. If you would invest  1,475  in Huntington Bancshares Incorporated on January 16, 2025 and sell it today you would lose (148.00) from holding Huntington Bancshares Incorporated or give up 10.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Zions Bancorp.  vs.  Huntington Bancshares Incorpor

Zions Bancorporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zions Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Huntington Bancshares

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Zions Bancorporation and Huntington Bancshares

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

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.