Correlation Between CCC Intelligent and CSG Systems
Can any of the company-specific risk be diversified away by investing in both CCC Intelligent and CSG Systems 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 CCC Intelligent and CSG Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCC Intelligent Solutions and CSG Systems International, you can compare the effects of market volatilities on CCC Intelligent and CSG Systems 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 CCC Intelligent with a short position of CSG Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCC Intelligent and CSG Systems.
Diversification Opportunities for CCC Intelligent and CSG Systems
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CCC and CSG is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CCC Intelligent Solutions and CSG Systems International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSG Systems International and CCC Intelligent 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 CCC Intelligent Solutions are associated (or correlated) with CSG Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSG Systems International has no effect on the direction of CCC Intelligent i.e., CCC Intelligent and CSG Systems go up and down completely randomly.
Pair Corralation between CCC Intelligent and CSG Systems
Given the investment horizon of 90 days CCC Intelligent is expected to generate 1.76 times less return on investment than CSG Systems. But when comparing it to its historical volatility, CCC Intelligent Solutions is 1.51 times less risky than CSG Systems. It trades about 0.03 of its potential returns per unit of risk. CSG Systems International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,966 in CSG Systems International on August 24, 2024 and sell it today you would earn a total of 554.00 from holding CSG Systems International or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCC Intelligent Solutions vs. CSG Systems International
Performance |
| Timeline |
| CCC Intelligent Solutions |
| CSG Systems International |
CCC Intelligent and CSG Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCC Intelligent and CSG Systems
The main advantage of trading using opposite CCC Intelligent and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCC Intelligent position performs unexpectedly, CSG Systems 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 CSG Systems will offset losses from the drop in CSG Systems' long position.| CCC Intelligent vs. CSG Systems International | CCC Intelligent vs. Consensus Cloud Solutions | CCC Intelligent vs. Secureworks Corp | CCC Intelligent vs. Evertec |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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