Correlation Between CSG Systems and First Advantage
Can any of the company-specific risk be diversified away by investing in both CSG Systems and First Advantage 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 First Advantage 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 First Advantage Corp, you can compare the effects of market volatilities on CSG Systems and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and First Advantage.
Diversification Opportunities for CSG Systems and First Advantage
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSG and First is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage Corp 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of CSG Systems i.e., CSG Systems and First Advantage go up and down completely randomly.
Pair Corralation between CSG Systems and First Advantage
Given the investment horizon of 90 days CSG Systems International is expected to generate 0.93 times more return on investment than First Advantage. However, CSG Systems International is 1.08 times less risky than First Advantage. It trades about 0.21 of its potential returns per unit of risk. First Advantage Corp is currently generating about -0.02 per unit of risk. If you would invest 4,662 in CSG Systems International on August 26, 2024 and sell it today you would earn a total of 889.00 from holding CSG Systems International or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSG Systems International vs. First Advantage Corp
Performance |
| Timeline |
| CSG Systems International |
| First Advantage Corp |
CSG Systems and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and First Advantage
The main advantage of trading using opposite CSG Systems and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| CSG Systems vs. Oneconnect Financial Technology | CSG Systems vs. Global Business Travel | CSG Systems vs. Alight Inc | CSG Systems vs. CS Disco LLC |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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