Correlation Between NYSE Composite and CSG Systems
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and CSG Systems 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 NYSE Composite and CSG Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CSG Systems International, you can compare the effects of market volatilities on NYSE Composite and CSG Systems 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 NYSE Composite with a short position of CSG Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CSG Systems.
Diversification Opportunities for NYSE Composite and CSG Systems
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and CSG is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CSG Systems International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSG Systems International and NYSE Composite 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 NYSE Composite are associated (or correlated) with CSG Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSG Systems International has no effect on the direction of NYSE Composite i.e., NYSE Composite and CSG Systems go up and down completely randomly.
Pair Corralation between NYSE Composite and CSG Systems
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.37 times more return on investment than CSG Systems. However, NYSE Composite is 2.69 times less risky than CSG Systems. It trades about 0.11 of its potential returns per unit of risk. CSG Systems International is currently generating about 0.02 per unit of risk. If you would invest 1,760,743 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 251,602 from holding NYSE Composite or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. CSG Systems International
Performance |
| Timeline |
NYSE Composite and CSG Systems Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CSG Systems International
Pair trading matchups for CSG Systems
Pair Trading with NYSE Composite and CSG Systems
The main advantage of trading using opposite NYSE Composite and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, CSG Systems 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 CSG Systems will offset losses from the drop in CSG Systems' long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| CSG Systems vs. Oneconnect Financial Technology | CSG Systems vs. Global Business Travel | CSG Systems vs. Alight Inc | CSG Systems vs. CS Disco LLC |
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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