Correlation Between PNC Financial and Glacier Bancorp

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

Diversification Opportunities for PNC Financial and Glacier Bancorp

0.91

Correlation Coefficient

PNC Financial  Glacier Bancorp

Almost no diversification

The 3 months correlation between PNC and Glacier is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and PNC 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 PNC Financial Services 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 PNC Financial i.e., PNC Financial and Glacier Bancorp go up and down completely randomly.

Pair Corralation between PNC Financial and Glacier Bancorp

Considering the 90-day investment horizon PNC Financial Services is expected to generate 0.86 times more return on investment than Glacier Bancorp. However, PNC Financial Services is 1.16 times less risky than Glacier Bancorp. It trades about -0.09 of its potential returns per unit of risk. Glacier Bancorp is currently generating about -0.11 per unit of risk. If you would invest  19,318  in PNC Financial Services on December 26, 2024 and sell it today you would lose (1,628) from holding PNC Financial Services or give up 8.43% of portfolio value over 90 days.

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

PNC Financial Services  vs.  Glacier Bancorp

PNC Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days PNC Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 latest fragile performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with PNC Financial and Glacier Bancorp

The main advantage of trading using opposite PNC Financial and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC 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 PNC Financial Services 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.