Correlation Between United Bancshares and Unity Bancorp
Can any of the company-specific risk be diversified away by investing in both United Bancshares and Unity 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 United Bancshares and Unity Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancshares and Unity Bancorp, you can compare the effects of market volatilities on United Bancshares and Unity 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 United Bancshares with a short position of Unity Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancshares and Unity Bancorp.
Diversification Opportunities for United Bancshares and Unity Bancorp
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Unity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding United Bancshares and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and United Bancshares 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 United Bancshares are associated (or correlated) with Unity Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Bancorp has no effect on the direction of United Bancshares i.e., United Bancshares and Unity Bancorp go up and down completely randomly.
Pair Corralation between United Bancshares and Unity Bancorp
Given the investment horizon of 90 days United Bancshares is expected to generate 0.91 times more return on investment than Unity Bancorp. However, United Bancshares is 1.09 times less risky than Unity Bancorp. It trades about 0.13 of its potential returns per unit of risk. Unity Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,837 in United Bancshares on August 24, 2024 and sell it today you would earn a total of 203.00 from holding United Bancshares or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 9.07% |
| Values | Daily Returns |
United Bancshares vs. Unity Bancorp
Performance |
| Timeline |
| United Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Unity Bancorp |
United Bancshares and Unity Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancshares and Unity Bancorp
The main advantage of trading using opposite United Bancshares and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancshares position performs unexpectedly, Unity 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 Unity Bancorp will offset losses from the drop in Unity Bancorp's long position.| United Bancshares vs. CCSB Financial Corp | United Bancshares vs. Delhi Bank Corp | United Bancshares vs. Bank of Utica | United Bancshares vs. First Community Financial |
| Unity Bancorp vs. Affinity Bancshares | Unity Bancorp vs. Home Federal Bancorp | Unity Bancorp vs. Stellar Bancorp, | Unity Bancorp vs. Meridian Bank |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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