Correlation Between First Financial and Glacier Bancorp

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

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

Diversification Opportunities for First Financial and Glacier Bancorp

0.43

Correlation Coefficient

First Financial  Glacier Bancorp

Very weak diversification

The 3 months correlation between First and Glacier is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Bankshares and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and First Financial 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 First Financial Bankshares 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 First Financial i.e., First Financial and Glacier Bancorp go up and down completely randomly.

Pair Corralation between First Financial and Glacier Bancorp

Given the investment horizon of 90 days First Financial Bankshares is expected to generate 0.89 times more return on investment than Glacier Bancorp. However, First Financial Bankshares is 1.13 times less risky than Glacier Bancorp. It trades about 0.01 of its potential returns per unit of risk. Glacier Bancorp is currently generating about -0.12 per unit of risk. If you would invest  3,620  in First Financial Bankshares on December 29, 2024 and sell it today you would earn a total of  9.00  from holding First Financial Bankshares or generate 0.25% return on investment over 90 days.

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

First Financial Bankshares  vs.  Glacier Bancorp

First Financial Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Financial Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, First Financial 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 First Financial and Glacier Bancorp

The main advantage of trading using opposite First Financial and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial 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 First Financial Bankshares 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.