Correlation Between Affinity Bancshares and Glacier Bancorp
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Glacier Bancorp 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 Affinity Bancshares and Glacier Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Glacier Bancorp, you can compare the effects of market volatilities on Affinity Bancshares and Glacier Bancorp 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 Affinity Bancshares with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Glacier Bancorp.
Diversification Opportunities for Affinity Bancshares and Glacier Bancorp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Affinity and Glacier is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Affinity 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 Affinity Bancshares are associated (or correlated) with Glacier Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glacier Bancorp has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Glacier Bancorp go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Glacier Bancorp
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 28.06 times less return on investment than Glacier Bancorp. But when comparing it to its historical volatility, Affinity Bancshares is 3.86 times less risky than Glacier Bancorp. It trades about 0.04 of its potential returns per unit of risk. Glacier Bancorp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,713 in Glacier Bancorp on August 24, 2024 and sell it today you would earn a total of 996.00 from holding Glacier Bancorp or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. Glacier Bancorp
Performance |
| Timeline |
| Affinity Bancshares |
| Glacier Bancorp |
Affinity Bancshares and Glacier Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Glacier Bancorp
The main advantage of trading using opposite Affinity Bancshares and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Glacier Bancorp 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 Glacier Bancorp will offset losses from the drop in Glacier Bancorp's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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