Correlation Between Glacier Bancorp and Eagle Bancorp

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

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

Diversification Opportunities for Glacier Bancorp and Eagle Bancorp

-0.67

Correlation Coefficient

Glacier Bancorp  Eagle Bancorp

Excellent diversification

The 3 months correlation between Glacier and Eagle is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and Eagle Bancorp Montana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp Montana 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 Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp Montana has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and Eagle Bancorp go up and down completely randomly.

Pair Corralation between Glacier Bancorp and Eagle Bancorp

Given the investment horizon of 90 days Glacier Bancorp is expected to under-perform the Eagle Bancorp. In addition to that, Glacier Bancorp is 1.0 times more volatile than Eagle Bancorp Montana. It trades about -0.12 of its total potential returns per unit of risk. Eagle Bancorp Montana is currently generating about 0.13 per unit of volatility. If you would invest  1,484  in Eagle Bancorp Montana on December 29, 2024 and sell it today you would earn a total of  203.00  from holding Eagle Bancorp Montana or generate 13.68% return on investment over 90 days.

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

Glacier Bancorp  vs.  Eagle Bancorp Montana

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.

Eagle Bancorp Montana

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Bancorp Montana are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Eagle Bancorp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glacier Bancorp and Eagle Bancorp

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

The idea behind Glacier Bancorp and Eagle Bancorp Montana 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.