Correlation Between Equity Bancshares, and Unity Bancorp

Can any of the company-specific risk be diversified away by investing in both Equity 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 Equity 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 Equity Bancshares, and Unity Bancorp, you can compare the effects of market volatilities on Equity 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 Equity Bancshares, with a short position of Unity Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Unity Bancorp.

Diversification Opportunities for Equity Bancshares, and Unity Bancorp

0.43

Correlation Coefficient

Equity Bancshares,  Unity Bancorp

Very weak diversification

The 3 months correlation between Equity and Unity is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and Equity 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 Equity 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 Equity Bancshares, i.e., Equity Bancshares, and Unity Bancorp go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Unity Bancorp

Given the investment horizon of 90 days Equity Bancshares, is expected to under-perform the Unity Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Equity Bancshares, is 1.21 times less risky than Unity Bancorp. The stock trades about -0.09 of its potential returns per unit of risk. The Unity Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,524  in Unity Bancorp on May 13, 2025 and sell it today you would earn a total of  189.00  from holding Unity Bancorp or generate 4.18% return on investment over 90 days.

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

Equity Bancshares,  vs.  Unity Bancorp

Equity Bancshares,

Risk-Adjusted Performance

Weakest

Over the last 90 days Equity Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Unity Bancorp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Unity Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Equity Bancshares, and Unity Bancorp

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

The idea behind Equity Bancshares, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.