Correlation Between United Community and Oregon Pacific

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

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

Diversification Opportunities for United Community and Oregon Pacific

0.63

Correlation Coefficient

United Community  Oregon Pacific

Poor diversification

The 3 months correlation between United and Oregon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding United Community Banks, and Oregon Pacific Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oregon Pacific Bancorp and United Community 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 United Community Banks, are associated (or correlated) with Oregon Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oregon Pacific Bancorp has no effect on the direction of United Community i.e., United Community and Oregon Pacific go up and down completely randomly.

Pair Corralation between United Community and Oregon Pacific

Considering the 90-day investment horizon United Community Banks, is expected to generate 1.32 times more return on investment than Oregon Pacific. However, United Community is 1.32 times more volatile than Oregon Pacific Bancorp. It trades about 0.1 of its potential returns per unit of risk. Oregon Pacific Bancorp is currently generating about 0.09 per unit of risk. If you would invest  2,762  in United Community Banks, on May 6, 2025 and sell it today you would earn a total of  261.00  from holding United Community Banks, or generate 9.45% return on investment over 90 days.

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

United Community Banks,  vs.  Oregon Pacific Bancorp

United Community Banks,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Community Banks, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, United Community may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Oregon Pacific Bancorp

Risk-Adjusted Performance

Modest

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

Pair Trading with United Community and Oregon Pacific

The main advantage of trading using opposite United Community and Oregon Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Community position performs unexpectedly, Oregon Pacific 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 Oregon Pacific will offset losses from the drop in Oregon Pacific's long position.

The idea behind United Community Banks, and Oregon Pacific 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.