Correlation Between CSG Systems and Squarespace

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

Diversification Opportunities for CSG Systems and Squarespace

0.5

Correlation Coefficient

CSG Systems  Squarespace

Very weak diversification

The 3 months correlation between CSG and Squarespace is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Squarespace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Squarespace 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 Squarespace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Squarespace has no effect on the direction of CSG Systems i.e., CSG Systems and Squarespace go up and down completely randomly.

Pair Corralation between CSG Systems and Squarespace

Given the investment horizon of 90 days CSG Systems International is expected to generate 11.77 times more return on investment than Squarespace. However, CSG Systems is 11.77 times more volatile than Squarespace. It trades about 0.27 of its potential returns per unit of risk. Squarespace is currently generating about 0.1 per unit of risk. If you would invest  4,858  in CSG Systems International on August 13, 2024 and sell it today you would earn a total of  700.00  from holding CSG Systems International or generate 14.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	19.05%
Values	Daily Returns

CSG Systems International  vs.  Squarespace

CSG Systems International

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSG Systems International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, CSG Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Squarespace

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Squarespace has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Squarespace may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with CSG Systems and Squarespace

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

The idea behind CSG Systems International and Squarespace 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.