Correlation Between Glacier Bancorp and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Glacier Bancorp and First 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 Glacier Bancorp and First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glacier Bancorp and First Bancorp, you can compare the effects of market volatilities on Glacier Bancorp and First 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 Glacier Bancorp with a short position of First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glacier Bancorp and First Bancorp.
Diversification Opportunities for Glacier Bancorp and First Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glacier and First is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and First Bancorp go up and down completely randomly.
Pair Corralation between Glacier Bancorp and First Bancorp
Given the investment horizon of 90 days Glacier Bancorp is expected to under-perform the First Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Glacier Bancorp is 1.24 times less risky than First Bancorp. The stock trades about -0.04 of its potential returns per unit of risk. The First Bancorp is currently generating about -0.02 of returns per unit of risk over similar time horizon. 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 |
Glacier Bancorp vs. First Bancorp
Performance |
| Timeline |
| Glacier Bancorp |
| First Bancorp |
Glacier Bancorp and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glacier Bancorp and First Bancorp
The main advantage of trading using opposite Glacier Bancorp and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glacier Bancorp position performs unexpectedly, First 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 First Bancorp will offset losses from the drop in First Bancorp's long position.| Glacier Bancorp vs. Comerica | Glacier Bancorp vs. Truist Financial Corp | Glacier Bancorp vs. Fifth Third Bancorp | Glacier Bancorp vs. Zions Bancorporation |
| First Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward Bancorp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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