Correlation Between CSG Systems and Steer Technologies
Can any of the company-specific risk be diversified away by investing in both CSG Systems and Steer Technologies 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 Steer Technologies 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 Steer Technologies, you can compare the effects of market volatilities on CSG Systems and Steer Technologies 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 Steer Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Steer Technologies.
Diversification Opportunities for CSG Systems and Steer Technologies
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSG and Steer is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Steer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steer Technologies 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 Steer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steer Technologies has no effect on the direction of CSG Systems i.e., CSG Systems and Steer Technologies go up and down completely randomly.
Pair Corralation between CSG Systems and Steer Technologies
Given the investment horizon of 90 days CSG Systems is expected to generate 2.27 times less return on investment than Steer Technologies. But when comparing it to its historical volatility, CSG Systems International is 1.15 times less risky than Steer Technologies. It trades about 0.03 of its potential returns per unit of risk. Steer Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,186 in Steer Technologies on September 4, 2024 and sell it today you would earn a total of 488.00 from holding Steer Technologies or generate 41.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.1% |
| Values | Daily Returns |
CSG Systems International vs. Steer Technologies
Performance |
| Timeline |
| CSG Systems International |
| Steer Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
CSG Systems and Steer Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and Steer Technologies
The main advantage of trading using opposite CSG Systems and Steer Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Steer Technologies 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 Steer Technologies will offset losses from the drop in Steer Technologies' long position.| CSG Systems vs. NetScout Systems | CSG Systems vs. Consensus Cloud Solutions | CSG Systems vs. Secureworks Corp | CSG Systems vs. Evertec |
| Steer Technologies vs. EverCommerce | Steer Technologies vs. Evertec | Steer Technologies vs. Consensus Cloud Solutions | Steer Technologies vs. CSG Systems International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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