Correlation Between HEALTHCARE and Glacier Bancorp

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

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

Diversification Opportunities for HEALTHCARE and Glacier Bancorp

-0.26

Correlation Coefficient

HEALTHCARE  Glacier Bancorp

Very good diversification

The 3 months correlation between HEALTHCARE and Glacier is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE TRUST OF and Glacier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Bancorp and HEALTHCARE 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 HEALTHCARE TRUST OF 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 HEALTHCARE i.e., HEALTHCARE and Glacier Bancorp go up and down completely randomly.

Pair Corralation between HEALTHCARE and Glacier Bancorp

Assuming the 90 days trading horizon HEALTHCARE TRUST OF is expected to under-perform the Glacier Bancorp. But the bond apears to be less risky and, when comparing its historical volatility, HEALTHCARE TRUST OF is 1.26 times less risky than Glacier Bancorp. The bond trades about -0.19 of its potential returns per unit of risk. The Glacier Bancorp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  5,094  in Glacier Bancorp on September 4, 2024 and sell it today you would earn a total of  710.00  from holding Glacier Bancorp or generate 13.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

HEALTHCARE TRUST OF  vs.  Glacier Bancorp

HEALTHCARE TRUST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEALTHCARE TRUST OF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HEALTHCARE TRUST OF investors.

Glacier Bancorp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 14 (%) 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 HEALTHCARE and Glacier Bancorp

The main advantage of trading using opposite HEALTHCARE and Glacier Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE 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 HEALTHCARE TRUST OF 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.