Correlation Between CSG Systems and ACI Worldwide
Can any of the company-specific risk be diversified away by investing in both CSG Systems and ACI Worldwide 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 CSG Systems and ACI Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSG Systems International and ACI Worldwide, you can compare the effects of market volatilities on CSG Systems and ACI Worldwide 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 CSG Systems with a short position of ACI Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and ACI Worldwide.
Diversification Opportunities for CSG Systems and ACI Worldwide
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CSG and ACI is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and ACI Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACI Worldwide and CSG Systems 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 CSG Systems International are associated (or correlated) with ACI Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACI Worldwide has no effect on the direction of CSG Systems i.e., CSG Systems and ACI Worldwide go up and down completely randomly.
Pair Corralation between CSG Systems and ACI Worldwide
Given the investment horizon of 90 days CSG Systems is expected to generate 4.86 times less return on investment than ACI Worldwide. In addition to that, CSG Systems is 1.15 times more volatile than ACI Worldwide. It trades about 0.03 of its total potential returns per unit of risk. ACI Worldwide is currently generating about 0.17 per unit of volatility. If you would invest 2,707 in ACI Worldwide on August 24, 2024 and sell it today you would earn a total of 2,865 from holding ACI Worldwide or generate 105.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSG Systems International vs. ACI Worldwide
Performance |
| Timeline |
| CSG Systems International |
| ACI Worldwide |
CSG Systems and ACI Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and ACI Worldwide
The main advantage of trading using opposite CSG Systems and ACI Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, ACI Worldwide 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 ACI Worldwide will offset losses from the drop in ACI Worldwide's long position.| CSG Systems vs. Palo Alto Networks | CSG Systems vs. Zscaler | CSG Systems vs. Cloudflare | CSG Systems vs. Okta Inc |
| ACI Worldwide vs. NetScout Systems | ACI Worldwide vs. Consensus Cloud Solutions | ACI Worldwide vs. CSG Systems International | ACI Worldwide vs. Remitly Global |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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