Correlation Between Highland Global and Unity Bancorp

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

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

Diversification Opportunities for Highland Global and Unity Bancorp

-0.2

Correlation Coefficient

Highland Global  Unity Bancorp

Good diversification

The 3 months correlation between Highland and Unity is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and Highland Global 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 Highland Global Allocation 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 Highland Global i.e., Highland Global and Unity Bancorp go up and down completely randomly.

Pair Corralation between Highland Global and Unity Bancorp

Given the investment horizon of 90 days Highland Global is expected to generate 2.12 times less return on investment than Unity Bancorp. But when comparing it to its historical volatility, Highland Global Allocation is 1.91 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 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,496  in Unity Bancorp on May 16, 2025 and sell it today you would earn a total of  438.00  from holding Unity Bancorp or generate 9.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Highland Global Allocation  vs.  Unity Bancorp

Highland Global Allo

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Highland Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Unity Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Unity Bancorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Highland Global and Unity Bancorp

The main advantage of trading using opposite Highland Global and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Global 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 Highland Global Allocation 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 CEOs Directory module to screen CEOs from public companies around the world.