Correlation Between CSG Systems and Gen Digital
Can any of the company-specific risk be diversified away by investing in both CSG Systems and Gen Digital 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 Gen Digital 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 Gen Digital, you can compare the effects of market volatilities on CSG Systems and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Gen Digital.
Diversification Opportunities for CSG Systems and Gen Digital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSG and Gen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of CSG Systems i.e., CSG Systems and Gen Digital go up and down completely randomly.
Pair Corralation between CSG Systems and Gen Digital
Given the investment horizon of 90 days CSG Systems International is expected to generate 1.45 times more return on investment than Gen Digital. However, CSG Systems is 1.45 times more volatile than Gen Digital. It trades about 0.21 of its potential returns per unit of risk. Gen Digital is currently generating about -0.01 per unit of risk. If you would invest 4,633 in CSG Systems International on November 1, 2024 and sell it today you would earn a total of 1,171 from holding CSG Systems International or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSG Systems International vs. Gen Digital
Performance |
| Timeline |
| CSG Systems International |
| Gen Digital |
CSG Systems and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and Gen Digital
The main advantage of trading using opposite CSG Systems and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| CSG Systems vs. NetScout Systems | CSG Systems vs. Consensus Cloud Solutions | CSG Systems vs. Secureworks Corp | CSG Systems vs. Evertec |
| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital vs. Global Blue Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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