Correlation Between Addus HomeCare and Glacier Bancorp

Can any of the company-specific risk be diversified away by investing in both Addus HomeCare 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 Addus HomeCare and Glacier Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Addus HomeCare and Glacier Bancorp, you can compare the effects of market volatilities on Addus HomeCare 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 Addus HomeCare with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Glacier Bancorp.

Diversification Opportunities for Addus HomeCare and Glacier Bancorp

0.83

Correlation Coefficient

Addus HomeCare  Glacier Bancorp

Very poor diversification

The 3 months correlation between Addus and Glacier is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Addus HomeCare 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 Addus HomeCare 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 Addus HomeCare i.e., Addus HomeCare and Glacier Bancorp go up and down completely randomly.

Pair Corralation between Addus HomeCare and Glacier Bancorp

Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the Glacier Bancorp. In addition to that, Addus HomeCare is 1.3 times more volatile than Glacier Bancorp. It trades about -0.28 of its total potential returns per unit of risk. Glacier Bancorp is currently generating about -0.14 per unit of volatility. If you would invest  5,113  in Glacier Bancorp on December 25, 2024 and sell it today you would lose (683.00) from holding Glacier Bancorp or give up 13.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Addus HomeCare  vs.  Glacier Bancorp

Addus HomeCare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Addus HomeCare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Glacier Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glacier Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Addus HomeCare and Glacier Bancorp

The main advantage of trading using opposite Addus HomeCare and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare 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.

The idea behind Addus HomeCare and Glacier Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.