Correlation Between Glacier Bancorp and Cathay General
Can any of the company-specific risk be diversified away by investing in both Glacier Bancorp and Cathay General 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 Glacier Bancorp and Cathay General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glacier Bancorp and Cathay General Bancorp, you can compare the effects of market volatilities on Glacier Bancorp and Cathay General 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 Glacier Bancorp with a short position of Cathay General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glacier Bancorp and Cathay General.
Diversification Opportunities for Glacier Bancorp and Cathay General
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Glacier and Cathay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and Cathay General Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay General Bancorp and Glacier 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 Glacier Bancorp are associated (or correlated) with Cathay General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay General Bancorp has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and Cathay General go up and down completely randomly.
Pair Corralation between Glacier Bancorp and Cathay General
Given the investment horizon of 90 days Glacier Bancorp is expected to generate 1.22 times more return on investment than Cathay General. However, Glacier Bancorp is 1.22 times more volatile than Cathay General Bancorp. It trades about 0.02 of its potential returns per unit of risk. Cathay General Bancorp is currently generating about 0.02 per unit of risk. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glacier Bancorp vs. Cathay General Bancorp
Performance |
| Timeline |
| Glacier Bancorp |
| Cathay General Bancorp |
Glacier Bancorp and Cathay General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glacier Bancorp and Cathay General
The main advantage of trading using opposite Glacier Bancorp and Cathay General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glacier Bancorp position performs unexpectedly, Cathay General 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 Cathay General will offset losses from the drop in Cathay General's long position.| Glacier Bancorp vs. CVB Financial | Glacier Bancorp vs. Columbia Banking System | Glacier Bancorp vs. First Financial Bankshares | Glacier Bancorp vs. BancFirst |
| Cathay General vs. Glacier Bancorp | Cathay General vs. Capitol Federal Financial | Cathay General vs. Byline Bancorp | Cathay General 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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