Correlation Between Capitol Federal and Glacier Bancorp
Can any of the company-specific risk be diversified away by investing in both Capitol Federal 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 Capitol Federal and Glacier Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Federal Financial and Glacier Bancorp, you can compare the effects of market volatilities on Capitol Federal 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 Capitol Federal with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Federal and Glacier Bancorp.
Diversification Opportunities for Capitol Federal and Glacier Bancorp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capitol and Glacier is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Federal Financial and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Capitol Federal 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 Capitol Federal Financial 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 Capitol Federal i.e., Capitol Federal and Glacier Bancorp go up and down completely randomly.
Pair Corralation between Capitol Federal and Glacier Bancorp
Given the investment horizon of 90 days Capitol Federal Financial is expected to under-perform the Glacier Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Capitol Federal Financial is 1.11 times less risky than Glacier Bancorp. The stock trades about -0.01 of its potential returns per unit of risk. The Glacier Bancorp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,409 in Glacier Bancorp on November 2, 2024 and sell it today you would earn a total of 565.00 from holding Glacier Bancorp or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Federal Financial vs. Glacier Bancorp
Performance |
| Timeline |
| Capitol Federal Financial |
| Glacier Bancorp |
Capitol Federal and Glacier Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Federal and Glacier Bancorp
The main advantage of trading using opposite Capitol Federal and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Federal 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.| Capitol Federal vs. Independent Bank | Capitol Federal vs. BankFinancial | Capitol Federal vs. Business First Bancshares | Capitol Federal vs. First Bancorp |
| Glacier Bancorp vs. CVB Financial | Glacier Bancorp vs. Columbia Banking System | Glacier Bancorp vs. First Financial Bankshares | Glacier Bancorp vs. BancFirst |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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