Correlation Between Informatica and CSG Systems

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

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

Diversification Opportunities for Informatica and CSG Systems

-0.14

Correlation Coefficient

Informatica  CSG Systems

Good diversification

The 3 months correlation between Informatica and CSG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Informatica 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 Informatica 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 Informatica 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 Informatica i.e., Informatica and CSG Systems go up and down completely randomly.

Pair Corralation between Informatica and CSG Systems

Given the investment horizon of 90 days Informatica is expected to generate 1.64 times more return on investment than CSG Systems. However, Informatica is 1.64 times more volatile than CSG Systems International. It trades about 0.18 of its potential returns per unit of risk. CSG Systems International is currently generating about -0.01 per unit of risk. If you would invest  1,937  in Informatica on May 11, 2025 and sell it today you would earn a total of  530.00  from holding Informatica or generate 27.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Informatica  vs.  CSG Systems International

Informatica

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Informatica sustained solid returns over the last few months and may actually be approaching a breakup point.

CSG Systems International

Risk-Adjusted Performance

Weakest

Over the last 90 days CSG Systems International has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Informatica and CSG Systems

The main advantage of trading using opposite Informatica and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Informatica 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 Informatica 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.