Correlation Between Freedom Bank and Glacier Bancorp
Can any of the company-specific risk be diversified away by investing in both Freedom Bank 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 Freedom Bank and Glacier Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Glacier Bancorp, you can compare the effects of market volatilities on Freedom Bank 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 Freedom Bank with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Glacier Bancorp.
Diversification Opportunities for Freedom Bank and Glacier Bancorp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Freedom and Glacier is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Freedom Bank 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 Freedom Bank of 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 Freedom Bank i.e., Freedom Bank and Glacier Bancorp go up and down completely randomly.
Pair Corralation between Freedom Bank and Glacier Bancorp
Given the investment horizon of 90 days Freedom Bank is expected to generate 15.16 times less return on investment than Glacier Bancorp. But when comparing it to its historical volatility, Freedom Bank of is 4.24 times less risky than Glacier Bancorp. It trades about 0.06 of its potential returns per unit of risk. Glacier Bancorp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,168 in Glacier Bancorp on September 2, 2024 and sell it today you would earn a total of 621.00 from holding Glacier Bancorp or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Bank of vs. Glacier Bancorp
Performance |
| Timeline |
| Freedom Bank |
| Glacier Bancorp |
Freedom Bank and Glacier Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Glacier Bancorp
The main advantage of trading using opposite Freedom Bank and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank 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.| Freedom Bank vs. HUMANA INC | Freedom Bank vs. SCOR PK | Freedom Bank vs. Aquagold International | Freedom Bank vs. Thrivent High Yield |
| Glacier Bancorp vs. CVB Financial | Glacier Bancorp vs. Independent Bank Group | Glacier Bancorp vs. Columbia Banking System | Glacier Bancorp vs. First Financial Bankshares |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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