Correlation Between Exponent and CSG Systems

Can any of the company-specific risk be diversified away by investing in both Exponent 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 Exponent and CSG Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exponent and CSG Systems International, you can compare the effects of market volatilities on Exponent 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 Exponent with a short position of CSG Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and CSG Systems.

Diversification Opportunities for Exponent and CSG Systems

0.0

Correlation Coefficient

Exponent  CSG Systems

Pay attention - limited upside

The 3 months correlation between Exponent and CSG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exponent 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 Exponent 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 Exponent 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 Exponent i.e., Exponent and CSG Systems go up and down completely randomly.

Pair Corralation between Exponent and CSG Systems

Given the investment horizon of 90 days Exponent is expected to under-perform the CSG Systems. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 1.05 times less risky than CSG Systems. The stock trades about -0.07 of its potential returns per unit of risk. The CSG Systems International is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Exponent  vs.  CSG Systems International

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 inconsistent 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.

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.

Pair Trading with Exponent and CSG Systems

The main advantage of trading using opposite Exponent and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent 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.

The idea behind Exponent and CSG Systems International 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.