Correlation Between CSG Systems and Sterling Check
Can any of the company-specific risk be diversified away by investing in both CSG Systems and Sterling Check 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 Sterling Check 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 Sterling Check Corp, you can compare the effects of market volatilities on CSG Systems and Sterling Check 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 Sterling Check. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Sterling Check.
Diversification Opportunities for CSG Systems and Sterling Check
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSG and Sterling is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Sterling Check Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Check 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 Sterling Check. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Check Corp has no effect on the direction of CSG Systems i.e., CSG Systems and Sterling Check go up and down completely randomly.
Pair Corralation between CSG Systems and Sterling Check
Given the investment horizon of 90 days CSG Systems is expected to generate 10.53 times less return on investment than Sterling Check. But when comparing it to its historical volatility, CSG Systems International is 1.33 times less risky than Sterling Check. It trades about 0.0 of its potential returns per unit of risk. Sterling Check Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,365 in Sterling Check Corp on October 20, 2024 and sell it today you would earn a total of 309.00 from holding Sterling Check Corp or generate 22.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.49% |
| Values | Daily Returns |
CSG Systems International vs. Sterling Check Corp
Performance |
| Timeline |
| CSG Systems International |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CSG Systems and Sterling Check Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSG Systems and Sterling Check
The main advantage of trading using opposite CSG Systems and Sterling Check positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Sterling Check 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 Sterling Check will offset losses from the drop in Sterling Check's long position.| CSG Systems vs. NetScout Systems | CSG Systems vs. Consensus Cloud Solutions | CSG Systems vs. Secureworks Corp | CSG Systems vs. Evertec |
| Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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