Correlation Between ForgeRock and CSG Systems

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

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

Diversification Opportunities for ForgeRock and CSG Systems

0.0

Correlation Coefficient

ForgeRock  CSG Systems

Pay attention - limited upside

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

Pair Corralation between ForgeRock and CSG Systems

If you would invest  5,097  in CSG Systems International on January 5, 2025 and sell it today you would earn a total of  808.00  from holding CSG Systems International or generate 15.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ForgeRock  vs.  CSG Systems International

ForgeRock

Risk-Adjusted Performance

Very Weak

Over the last 90 days ForgeRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ForgeRock is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CSG Systems International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSG Systems International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, CSG Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ForgeRock and CSG Systems

The main advantage of trading using opposite ForgeRock and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ForgeRock 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 ForgeRock 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.