Correlation Between Check Point and CSG Systems
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and CSG Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and CSG Systems International, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of CSG Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and CSG Systems.
Diversification Opportunities for Check Point and CSG Systems
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and CSG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and CSG Systems go up and down completely randomly.
Pair Corralation between Check Point and CSG Systems
Given the investment horizon of 90 days Check Point Software is expected to under-perform the CSG Systems. In addition to that, Check Point is 1.25 times more volatile than CSG Systems International. It trades about -0.03 of its total potential returns per unit of risk. CSG Systems International is currently generating about 0.15 per unit of volatility. If you would invest 4,714 in CSG Systems International on October 26, 2024 and sell it today you would earn a total of 784.00 from holding CSG Systems International or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. CSG Systems International
Performance |
| Timeline |
| Check Point Software |
| CSG Systems International |
Check Point and CSG Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and CSG Systems
The main advantage of trading using opposite Check Point and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Rapid7 Inc | Check Point vs. Tenable Holdings | Check Point vs. Okta Inc | Check Point vs. WixCom |
| CSG Systems vs. NetScout Systems | CSG Systems vs. Consensus Cloud Solutions | CSG Systems vs. Secureworks Corp | CSG Systems vs. Evertec |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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