Correlation Between First Bancorp and Glacier Bancorp
Can any of the company-specific risk be diversified away by investing in both First 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 First 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 First Bancorp and Glacier Bancorp, you can compare the effects of market volatilities on First 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 First Bancorp with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and Glacier Bancorp.
Diversification Opportunities for First Bancorp and Glacier Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Glacier is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and First 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 First 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 First Bancorp i.e., First Bancorp and Glacier Bancorp go up and down completely randomly.
Pair Corralation between First Bancorp and Glacier Bancorp
Given the investment horizon of 90 days First Bancorp is expected to generate 1.24 times more return on investment than Glacier Bancorp. However, First Bancorp is 1.24 times more volatile than Glacier Bancorp. It trades about -0.02 of its potential returns per unit of risk. Glacier Bancorp is currently generating about -0.04 per unit of risk. If you would invest 2,882 in First Bancorp on September 14, 2024 and sell it today you would lose (19.00) from holding First Bancorp or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Bancorp vs. Glacier Bancorp
Performance |
| Timeline |
| First Bancorp |
| Glacier Bancorp |
First Bancorp and Glacier Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancorp and Glacier Bancorp
The main advantage of trading using opposite First Bancorp and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First 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.| First Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward Bancorp |
| Glacier Bancorp vs. Comerica | Glacier Bancorp vs. Truist Financial Corp | Glacier Bancorp vs. Fifth Third Bancorp | Glacier Bancorp vs. Zions Bancorporation |
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 Stocks Directory module to find actively traded stocks across global markets.
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