Correlation Between Glacier Bancorp and Cool

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

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

Diversification Opportunities for Glacier Bancorp and Cool

-0.18

Correlation Coefficient

Glacier Bancorp  Cool

Good diversification

The 3 months correlation between Glacier and Cool is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company and Glacier 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 Glacier Bancorp are associated (or correlated) with Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and Cool go up and down completely randomly.

Pair Corralation between Glacier Bancorp and Cool

Given the investment horizon of 90 days Glacier Bancorp is expected to generate 11.58 times less return on investment than Cool. But when comparing it to its historical volatility, Glacier Bancorp is 1.11 times less risky than Cool. It trades about 0.03 of its potential returns per unit of risk. Cool Company is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  777.00  in Cool Company on October 25, 2024 and sell it today you would earn a total of  102.00  from holding Cool Company or generate 13.13% return on investment over 90 days.

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

Glacier Bancorp  vs.  Cool Company

Glacier Bancorp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Glacier Bancorp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Cool Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cool Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Glacier Bancorp and Cool

The main advantage of trading using opposite Glacier Bancorp and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glacier Bancorp position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.

The idea behind Glacier Bancorp and Cool Company 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.