Correlation Between Wex and CSG Systems
Can any of the company-specific risk be diversified away by investing in both Wex 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 Wex and CSG Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wex Inc and CSG Systems International, you can compare the effects of market volatilities on Wex 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 Wex with a short position of CSG Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wex and CSG Systems.
Diversification Opportunities for Wex and CSG Systems
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wex and CSG is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wex Inc 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 Wex 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 Wex Inc 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 Wex i.e., Wex and CSG Systems go up and down completely randomly.
Pair Corralation between Wex and CSG Systems
Considering the 90-day investment horizon Wex Inc is expected to under-perform the CSG Systems. In addition to that, Wex is 1.45 times more volatile than CSG Systems International. It trades about -0.07 of its total potential returns per unit of risk. CSG Systems International is currently generating about 0.21 per unit of volatility. If you would invest 4,662 in CSG Systems International on August 26, 2024 and sell it today you would earn a total of 889.00 from holding CSG Systems International or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wex Inc vs. CSG Systems International
Performance |
| Timeline |
| Wex Inc |
| CSG Systems International |
Wex and CSG Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wex and CSG Systems
The main advantage of trading using opposite Wex and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wex 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.| Wex vs. CSG Systems International | Wex vs. VeriSign | Wex vs. Consensus Cloud Solutions | Wex vs. Global Blue Group |
| 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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |