Correlation Between Catalyst Bancorp and NETGEAR

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Can any of the company-specific risk be diversified away by investing in both Catalyst Bancorp and NETGEAR 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 Catalyst Bancorp and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Bancorp and NETGEAR, you can compare the effects of market volatilities on Catalyst Bancorp and NETGEAR 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 Catalyst Bancorp with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Bancorp and NETGEAR.

Diversification Opportunities for Catalyst Bancorp and NETGEAR

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Catalyst and NETGEAR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Bancorp and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Catalyst 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 Catalyst Bancorp are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Catalyst Bancorp i.e., Catalyst Bancorp and NETGEAR go up and down completely randomly.

Pair Corralation between Catalyst Bancorp and NETGEAR

Given the investment horizon of 90 days Catalyst Bancorp is expected to generate 0.48 times more return on investment than NETGEAR. However, Catalyst Bancorp is 2.09 times less risky than NETGEAR. It trades about 0.1 of its potential returns per unit of risk. NETGEAR is currently generating about -0.12 per unit of risk. If you would invest  1,160  in Catalyst Bancorp on May 4, 2025 and sell it today you would earn a total of  80.00  from holding Catalyst Bancorp or generate 6.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.41%
ValuesDaily Returns

Catalyst Bancorp  vs.  NETGEAR

 Performance 
       Timeline  
Catalyst Bancorp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Bancorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Catalyst Bancorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.
NETGEAR 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Catalyst Bancorp and NETGEAR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Catalyst Bancorp and NETGEAR

The main advantage of trading using opposite Catalyst Bancorp and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Bancorp position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.
The idea behind Catalyst Bancorp and NETGEAR 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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