Correlation Between East Africa and Glacier Bancorp

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

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

Diversification Opportunities for East Africa and Glacier Bancorp

-0.59

Correlation Coefficient

East Africa  Glacier Bancorp

Excellent diversification

The 3 months correlation between East and Glacier is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and Glacier Bancorp go up and down completely randomly.

Pair Corralation between East Africa and Glacier Bancorp

If you would invest  11.00  in East Africa Metals on September 27, 2024 and sell it today you would earn a total of  0.00  from holding East Africa Metals or generate 0.0% return on investment over 90 days.

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

East Africa Metals  vs.  Glacier Bancorp

East Africa Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Africa Metals 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 primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Glacier Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Glacier Bancorp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with East Africa and Glacier Bancorp

The main advantage of trading using opposite East Africa and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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 East Africa Metals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.