Correlation Between ConnectOne Bancorp and Glacier Bancorp

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

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

Diversification Opportunities for ConnectOne Bancorp and Glacier Bancorp

0.24

Correlation Coefficient

ConnectOne Bancorp  Glacier Bancorp

Modest diversification

The 3 months correlation between ConnectOne and Glacier is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and ConnectOne 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 ConnectOne Bancorp 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 ConnectOne Bancorp i.e., ConnectOne Bancorp and Glacier Bancorp go up and down completely randomly.

Pair Corralation between ConnectOne Bancorp and Glacier Bancorp

Given the investment horizon of 90 days ConnectOne Bancorp is expected to generate 1.15 times more return on investment than Glacier Bancorp. However, ConnectOne Bancorp is 1.15 times more volatile than Glacier Bancorp. It trades about 0.05 of its potential returns per unit of risk. Glacier Bancorp is currently generating about -0.1 per unit of risk. If you would invest  2,293  in ConnectOne Bancorp on December 24, 2024 and sell it today you would earn a total of  99.00  from holding ConnectOne Bancorp or generate 4.32% return on investment over 90 days.

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

ConnectOne Bancorp  vs.  Glacier Bancorp

ConnectOne Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ConnectOne Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ConnectOne Bancorp is not utilizing all of its potentials. The current stock price disturbance, 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 latest fragile performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with ConnectOne Bancorp and Glacier Bancorp

The main advantage of trading using opposite ConnectOne Bancorp and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp 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 ConnectOne Bancorp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.