Correlation Between Capitol Federal and Glacier Bancorp

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

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

Diversification Opportunities for Capitol Federal and Glacier Bancorp

0.32

Correlation Coefficient

Capitol Federal  Glacier Bancorp

Weak diversification

The 3 months correlation between Capitol and Glacier is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Federal Financial and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Capitol Federal 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 Capitol Federal Financial 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 Capitol Federal i.e., Capitol Federal and Glacier Bancorp go up and down completely randomly.

Pair Corralation between Capitol Federal and Glacier Bancorp

Given the investment horizon of 90 days Capitol Federal Financial is expected to generate 0.82 times more return on investment than Glacier Bancorp. However, Capitol Federal Financial is 1.22 times less risky than Glacier Bancorp. It trades about -0.02 of its potential returns per unit of risk. Glacier Bancorp is currently generating about -0.12 per unit of risk. If you would invest  584.00  in Capitol Federal Financial on December 29, 2024 and sell it today you would lose (15.00) from holding Capitol Federal Financial or give up 2.57% of portfolio value over 90 days.

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

Capitol Federal Financial  vs.  Glacier Bancorp

Capitol Federal Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capitol Federal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Capitol Federal is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the 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 Capitol Federal and Glacier Bancorp

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

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.