Correlation Between Catalyst Bancorp and SVB T

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

By analyzing existing cross correlation between Catalyst Bancorp and SVB T Corp, you can compare the effects of market volatilities on Catalyst Bancorp and SVB T 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 SVB T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Bancorp and SVB T.

Diversification Opportunities for Catalyst Bancorp and SVB T

-0.25

Correlation Coefficient

Catalyst Bancorp  SVB T

Very good diversification

The 3 months correlation between Catalyst and SVB is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Bancorp and SVB T Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB T Corp 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 SVB T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB T Corp has no effect on the direction of Catalyst Bancorp i.e., Catalyst Bancorp and SVB T go up and down completely randomly.

Pair Corralation between Catalyst Bancorp and SVB T

Given the investment horizon of 90 days Catalyst Bancorp is expected to generate 1.71 times less return on investment than SVB T. But when comparing it to its historical volatility, Catalyst Bancorp is 1.72 times less risky than SVB T. It trades about 0.01 of its potential returns per unit of risk. SVB T Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,373  in SVB T Corp on December 4, 2024 and sell it today you would lose (43.00) from holding SVB T Corp or give up 0.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.71%
Values	Daily Returns

Catalyst Bancorp  vs.  SVB T Corp

Catalyst Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Catalyst Bancorp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SVB T Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SVB T Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, SVB T is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Catalyst Bancorp and SVB T

The main advantage of trading using opposite Catalyst Bancorp and SVB T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Bancorp position performs unexpectedly, SVB T 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 SVB T will offset losses from the drop in SVB T's long position.

The idea behind Catalyst Bancorp and SVB T Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.