Correlation Between Utah Medical and Unity Bancorp
Can any of the company-specific risk be diversified away by investing in both Utah Medical 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 Utah Medical and Unity Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utah Medical Products and Unity Bancorp, you can compare the effects of market volatilities on Utah Medical 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 Utah Medical with a short position of Unity Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utah Medical and Unity Bancorp.
Diversification Opportunities for Utah Medical and Unity Bancorp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Utah and Unity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and Utah Medical 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 Utah Medical Products 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 Utah Medical i.e., Utah Medical and Unity Bancorp go up and down completely randomly.
Pair Corralation between Utah Medical and Unity Bancorp
Given the investment horizon of 90 days Utah Medical Products is expected to under-perform the Unity Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Utah Medical Products is 1.21 times less risky than Unity Bancorp. The stock trades about -0.04 of its potential returns per unit of risk. The Unity Bancorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,690 in Unity Bancorp on August 28, 2024 and sell it today you would earn a total of 1,977 from holding Unity Bancorp or generate 73.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Utah Medical Products vs. Unity Bancorp
Performance |
| Timeline |
| Utah Medical Products |
| Unity Bancorp |
Utah Medical and Unity Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utah Medical and Unity Bancorp
The main advantage of trading using opposite Utah Medical and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utah Medical 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.| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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