Correlation Between Rhinebeck Bancorp and Unity Bancorp
Can any of the company-specific risk be diversified away by investing in both Rhinebeck Bancorp 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 Rhinebeck Bancorp and Unity Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rhinebeck Bancorp and Unity Bancorp, you can compare the effects of market volatilities on Rhinebeck Bancorp 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 Rhinebeck Bancorp with a short position of Unity Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rhinebeck Bancorp and Unity Bancorp.
Diversification Opportunities for Rhinebeck Bancorp and Unity Bancorp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rhinebeck and Unity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rhinebeck Bancorp and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp and Rhinebeck Bancorp 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 Rhinebeck Bancorp 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 Rhinebeck Bancorp i.e., Rhinebeck Bancorp and Unity Bancorp go up and down completely randomly.
Pair Corralation between Rhinebeck Bancorp and Unity Bancorp
Given the investment horizon of 90 days Rhinebeck Bancorp is expected to generate 1.0 times less return on investment than Unity Bancorp. But when comparing it to its historical volatility, Rhinebeck Bancorp is 1.17 times less risky than Unity Bancorp. It trades about 0.12 of its potential returns per unit of risk. Unity Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,276 in Unity Bancorp on May 7, 2025 and sell it today you would earn a total of 512.00 from holding Unity Bancorp or generate 11.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Rhinebeck Bancorp vs. Unity Bancorp
Performance |
Timeline |
Rhinebeck Bancorp |
Unity Bancorp |
Rhinebeck Bancorp and Unity Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rhinebeck Bancorp and Unity Bancorp
The main advantage of trading using opposite Rhinebeck Bancorp and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rhinebeck Bancorp 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.Rhinebeck Bancorp vs. Sound Financial Bancorp | Rhinebeck Bancorp vs. Finward Bancorp | Rhinebeck Bancorp vs. Franklin Financial Services | Rhinebeck Bancorp vs. Community West Bancshares |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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