Correlation Between ACNB and Unity Bancorp

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

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

Diversification Opportunities for ACNB and Unity Bancorp

0.66

Correlation Coefficient

ACNB  Unity Bancorp

Poor diversification

The 3 months correlation between ACNB and Unity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and ACNB 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 ACNB Corporation 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 ACNB i.e., ACNB and Unity Bancorp go up and down completely randomly.

Pair Corralation between ACNB and Unity Bancorp

Given the investment horizon of 90 days ACNB Corporation is expected to generate 0.71 times more return on investment than Unity Bancorp. However, ACNB Corporation is 1.4 times less risky than Unity Bancorp. It trades about 0.08 of its potential returns per unit of risk. Unity Bancorp is currently generating about -0.02 per unit of risk. If you would invest  4,164  in ACNB Corporation on August 2, 2025 and sell it today you would earn a total of  333.00  from holding ACNB Corporation or generate 8.0% return on investment over 90 days.

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

ACNB Corp.  vs.  Unity Bancorp

ACNB

Risk-Adjusted Performance

Mild

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

Unity Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days Unity Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Unity Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ACNB and Unity Bancorp

The main advantage of trading using opposite ACNB and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB 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.

The idea behind ACNB Corporation and Unity 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.