Correlation Between CSG Systems and Exponent

Can any of the company-specific risk be diversified away by investing in both CSG Systems and Exponent 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 Exponent 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 Exponent, you can compare the effects of market volatilities on CSG Systems and Exponent 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 Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Exponent.

Diversification Opportunities for CSG Systems and Exponent

0.28

Correlation Coefficient

CSG Systems  Exponent

Modest diversification

The 3 months correlation between CSG and Exponent is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent 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 Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of CSG Systems i.e., CSG Systems and Exponent go up and down completely randomly.

Pair Corralation between CSG Systems and Exponent

Given the investment horizon of 90 days CSG Systems International is expected to generate 1.05 times more return on investment than Exponent. However, CSG Systems is 1.05 times more volatile than Exponent. It trades about 0.06 of its potential returns per unit of risk. Exponent is currently generating about -0.07 per unit of risk. If you would invest  5,908  in CSG Systems International on April 28, 2025 and sell it today you would earn a total of  302.00  from holding CSG Systems International or generate 5.11% 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.  Exponent

CSG Systems International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSG Systems International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, CSG Systems is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Exponent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CSG Systems and Exponent

The main advantage of trading using opposite CSG Systems and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSG Systems position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.

The idea behind CSG Systems International and Exponent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.