Correlation Between Eagle Bancorp and Glacier Bancorp
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp 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 Eagle Bancorp and Glacier Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Glacier Bancorp, you can compare the effects of market volatilities on Eagle Bancorp 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 Eagle Bancorp with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Glacier Bancorp.
Diversification Opportunities for Eagle Bancorp and Glacier Bancorp
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Glacier is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Eagle Bancorp 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 Eagle Bancorp 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 Eagle Bancorp i.e., Eagle Bancorp and Glacier Bancorp go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Glacier Bancorp
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 1.34 times less return on investment than Glacier Bancorp. In addition to that, Eagle Bancorp is 1.23 times more volatile than Glacier Bancorp. It trades about 0.06 of its total potential returns per unit of risk. Glacier Bancorp is currently generating about 0.09 per unit of volatility. If you would invest 2,944 in Glacier Bancorp on August 28, 2024 and sell it today you would earn a total of 2,945 from holding Glacier Bancorp or generate 100.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Glacier Bancorp
Performance |
| Timeline |
| Eagle Bancorp |
| Glacier Bancorp |
Eagle Bancorp and Glacier Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Glacier Bancorp
The main advantage of trading using opposite Eagle Bancorp and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp 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.| Eagle Bancorp vs. Fifth Third Bancorp | Eagle Bancorp vs. Huntington Bancshares Incorporated | Eagle Bancorp vs. MT Bank |
| Glacier Bancorp vs. Fifth Third Bancorp | Glacier Bancorp vs. Huntington Bancshares Incorporated | Glacier Bancorp vs. MT Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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