Correlation Between Bar Harbor and Unity Bancorp

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

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

Diversification Opportunities for Bar Harbor and Unity Bancorp

0.81

Correlation Coefficient

Bar Harbor  Unity Bancorp

Very poor diversification

The 3 months correlation between Bar and Unity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bar Harbor Bankshares and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and Bar Harbor 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 Bar Harbor Bankshares 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 Bar Harbor i.e., Bar Harbor and Unity Bancorp go up and down completely randomly.

Pair Corralation between Bar Harbor and Unity Bancorp

Considering the 90-day investment horizon Bar Harbor Bankshares is expected to generate 0.76 times more return on investment than Unity Bancorp. However, Bar Harbor Bankshares is 1.32 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 -0.09 per unit of risk. If you would invest  3,046  in Bar Harbor Bankshares on August 1, 2025 and sell it today you would lose (122.00) from holding Bar Harbor Bankshares or give up 4.01% of portfolio value over 90 days.

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

Bar Harbor Bankshares  vs.  Unity Bancorp

Bar Harbor Bankshares

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bar Harbor Bankshares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 Bar Harbor and Unity Bancorp

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

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.