Correlation Between Glacier Bancorp and Eldorado Gold

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

By analyzing existing cross correlation between Glacier Bancorp and Eldorado Gold Corp, you can compare the effects of market volatilities on Glacier Bancorp and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glacier Bancorp and Eldorado Gold.

Diversification Opportunities for Glacier Bancorp and Eldorado Gold

-0.72

Correlation Coefficient

Glacier Bancorp  Eldorado Gold

Pay attention - limited upside

The 3 months correlation between Glacier and Eldorado is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and Eldorado Gold go up and down completely randomly.

Pair Corralation between Glacier Bancorp and Eldorado Gold

Given the investment horizon of 90 days Glacier Bancorp is expected to generate 0.93 times more return on investment than Eldorado Gold. However, Glacier Bancorp is 1.08 times less risky than Eldorado Gold. It trades about 0.17 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.04 per unit of risk. If you would invest  4,377  in Glacier Bancorp on September 13, 2024 and sell it today you would earn a total of  1,153  from holding Glacier Bancorp or generate 26.34% 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.  Eldorado Gold Corp

Glacier Bancorp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 13 (%) 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.

Eldorado Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldorado Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Glacier Bancorp and Eldorado Gold

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

The idea behind Glacier Bancorp and Eldorado Gold Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.