Correlation Between CSG Systems and Okta
Can any of the company-specific risk be diversified away by investing in both CSG Systems and Okta 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 Okta 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 Okta Inc, you can compare the effects of market volatilities on CSG Systems and Okta 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 Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Okta.
Diversification Opportunities for CSG Systems and Okta
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CSG and Okta is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta 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 Okta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okta Inc has no effect on the direction of CSG Systems i.e., CSG Systems and Okta go up and down completely randomly.
Pair Corralation between CSG Systems and Okta
Given the investment horizon of 90 days CSG Systems International is expected to generate 1.44 times more return on investment than Okta. However, CSG Systems is 1.44 times more volatile than Okta Inc. It trades about 0.33 of its potential returns per unit of risk. Okta Inc is currently generating about 0.17 per unit of risk. If you would invest 4,659 in CSG Systems International on September 2, 2024 and sell it today you would earn a total of 822.00 from holding CSG Systems International or generate 17.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSG Systems International vs. Okta Inc
Performance |
| Timeline |
| CSG Systems International |
| Okta Inc |
CSG Systems and Okta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and Okta
The main advantage of trading using opposite CSG Systems and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Okta 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 Okta will offset losses from the drop in Okta'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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