Correlation Between Union Bankshares and Third Coast

Can any of the company-specific risk be diversified away by investing in both Union Bankshares and Third Coast 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 Union Bankshares and Third Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Union Bankshares and Third Coast

-0.37

Correlation Coefficient

Union Bankshares  Third Coast

Very good diversification

The 3 months correlation between Union and Third is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Union Bankshares and Third Coast Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Coast Bancshares and Union Bankshares 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 Union Bankshares are associated (or correlated) with Third Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Coast Bancshares has no effect on the direction of Union Bankshares i.e., Union Bankshares and Third Coast go up and down completely randomly.

Pair Corralation between Union Bankshares and Third Coast

Considering the 90-day investment horizon Union Bankshares is expected to under-perform the Third Coast. In addition to that, Union Bankshares is 1.07 times more volatile than Third Coast Bancshares. It trades about -0.02 of its total potential returns per unit of risk. Third Coast Bancshares is currently generating about 0.17 per unit of volatility. If you would invest  3,267  in Third Coast Bancshares on June 30, 2025 and sell it today you would earn a total of  674.00  from holding Third Coast Bancshares or generate 20.63% return on investment over 90 days.

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

Union Bankshares  vs.  Third Coast Bancshares

Union Bankshares

Risk-Adjusted Performance

Weakest

Over the last 90 days Union Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Union Bankshares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Third Coast Bancshares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Third Coast Bancshares are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Third Coast showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Union Bankshares and Third Coast

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

The idea behind Union Bankshares and Third Coast Bancshares 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.