Correlation Between CompoSecure and Glacier Bancorp

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

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

Diversification Opportunities for CompoSecure and Glacier Bancorp

0.28

Correlation Coefficient

CompoSecure  Glacier Bancorp

Modest diversification

The 3 months correlation between CompoSecure and Glacier is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and CompoSecure 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 CompoSecure 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 CompoSecure i.e., CompoSecure and Glacier Bancorp go up and down completely randomly.

Pair Corralation between CompoSecure and Glacier Bancorp

Assuming the 90 days horizon CompoSecure is expected to generate 1.07 times less return on investment than Glacier Bancorp. In addition to that, CompoSecure is 2.32 times more volatile than Glacier Bancorp. It trades about 0.03 of its total potential returns per unit of risk. Glacier Bancorp is currently generating about 0.07 per unit of volatility. If you would invest  4,745  in Glacier Bancorp on October 24, 2024 and sell it today you would earn a total of  418.00  from holding Glacier Bancorp or generate 8.81% return on investment over 90 days.

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

CompoSecure  vs.  Glacier Bancorp

CompoSecure

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CompoSecure may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Glacier Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Glacier Bancorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CompoSecure and Glacier Bancorp

The main advantage of trading using opposite CompoSecure and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompoSecure 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 CompoSecure 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.