Correlation Between CSG Systems and Edgio
Can any of the company-specific risk be diversified away by investing in both CSG Systems and Edgio 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 Edgio 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 Edgio Inc, you can compare the effects of market volatilities on CSG Systems and Edgio 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 Edgio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Edgio.
Diversification Opportunities for CSG Systems and Edgio
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSG and Edgio is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc 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 Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of CSG Systems i.e., CSG Systems and Edgio go up and down completely randomly.
Pair Corralation between CSG Systems and Edgio
Given the investment horizon of 90 days CSG Systems is expected to generate 111.87 times less return on investment than Edgio. But when comparing it to its historical volatility, CSG Systems International is 93.33 times less risky than Edgio. It trades about 0.13 of its potential returns per unit of risk. Edgio Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 970.00 in Edgio Inc on August 31, 2024 and sell it today you would lose (968.00) from holding Edgio Inc or give up 99.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.49% |
| Values | Daily Returns |
CSG Systems International vs. Edgio Inc
Performance |
| Timeline |
| CSG Systems International |
| Edgio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
CSG Systems and Edgio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and Edgio
The main advantage of trading using opposite CSG Systems and Edgio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Edgio 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 Edgio will offset losses from the drop in Edgio's long position.| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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