Correlation Between Glacier Bancorp and East West

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

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

Diversification Opportunities for Glacier Bancorp and East West

0.92

Correlation Coefficient

Glacier Bancorp  East West

Almost no diversification

The 3 months correlation between Glacier and East is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and East West Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Bancorp 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Bancorp has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and East West go up and down completely randomly.

Pair Corralation between Glacier Bancorp and East West

Given the investment horizon of 90 days Glacier Bancorp is expected to generate 1.53 times less return on investment than East West. In addition to that, Glacier Bancorp is 1.11 times more volatile than East West Bancorp. It trades about 0.08 of its total potential returns per unit of risk. East West Bancorp is currently generating about 0.13 per unit of volatility. If you would invest  8,687  in East West Bancorp on May 7, 2025 and sell it today you would earn a total of  1,239  from holding East West Bancorp or generate 14.26% return on investment over 90 days.

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

Glacier Bancorp  vs.  East West Bancorp

Glacier Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental indicators, Glacier Bancorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

East West Bancorp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in East West Bancorp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, East West exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glacier Bancorp and East West

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

The idea behind Glacier Bancorp and East West 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.