Correlation Between VSE and CSG Systems

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

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

Diversification Opportunities for VSE and CSG Systems

-0.4

Correlation Coefficient

VSE  CSG Systems

Very good diversification

The 3 months correlation between VSE and CSG is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. 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 VSE 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 VSE Corporation 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 VSE i.e., VSE and CSG Systems go up and down completely randomly.

Pair Corralation between VSE and CSG Systems

Given the investment horizon of 90 days VSE Corporation is expected to generate 1.71 times more return on investment than CSG Systems. However, VSE is 1.71 times more volatile than CSG Systems International. It trades about 0.16 of its potential returns per unit of risk. CSG Systems International is currently generating about 0.0 per unit of risk. If you would invest  12,682  in VSE Corporation on May 22, 2025 and sell it today you would earn a total of  3,434  from holding VSE Corporation or generate 27.08% return on investment over 90 days.

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

VSE Corp.  vs.  CSG Systems International

VSE Corporation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VSE Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, VSE exhibited 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 VSE and CSG Systems

The main advantage of trading using opposite VSE and CSG Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE 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 VSE Corporation 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.