Correlation Between Malaga Financial and Glacier Bancorp

Can any of the company-specific risk be diversified away by investing in both Malaga 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 Malaga 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 Malaga Financial and Glacier Bancorp, you can compare the effects of market volatilities on Malaga 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 Malaga Financial with a short position of Glacier Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and Glacier Bancorp.

Diversification Opportunities for Malaga Financial and Glacier Bancorp

-0.17

Correlation Coefficient

Malaga Financial  Glacier Bancorp

Good diversification

The 3 months correlation between Malaga and Glacier is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and Malaga 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 Malaga Financial 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 Malaga Financial i.e., Malaga Financial and Glacier Bancorp go up and down completely randomly.

Pair Corralation between Malaga Financial and Glacier Bancorp

Given the investment horizon of 90 days Malaga Financial is expected to generate 2.15 times more return on investment than Glacier Bancorp. However, Malaga Financial is 2.15 times more volatile than Glacier Bancorp. It trades about 0.02 of its potential returns per unit of risk. Glacier Bancorp is currently generating about 0.03 per unit of risk. If you would invest  2,277  in Malaga Financial on October 20, 2024 and sell it today you would lose (147.00) from holding Malaga Financial or give up 6.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.22%
Values	Daily Returns

Malaga Financial  vs.  Glacier Bancorp

Malaga Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malaga Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Malaga Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 Malaga Financial and Glacier Bancorp

The main advantage of trading using opposite Malaga Financial and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga 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 Malaga Financial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.