Correlation Between Smartgiant Technology and CSG Holding

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

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

Diversification Opportunities for Smartgiant Technology and CSG Holding

0.36

Correlation Coefficient

Smartgiant Technology  CSG Holding

Weak diversification

The 3 months correlation between Smartgiant and CSG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Smartgiant Technology Co and CSG Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSG Holding and Smartgiant Technology 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 Smartgiant Technology Co are associated (or correlated) with CSG Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSG Holding has no effect on the direction of Smartgiant Technology i.e., Smartgiant Technology and CSG Holding go up and down completely randomly.

Pair Corralation between Smartgiant Technology and CSG Holding

Assuming the 90 days trading horizon Smartgiant Technology Co is expected to generate 1.6 times more return on investment than CSG Holding. However, Smartgiant Technology is 1.6 times more volatile than CSG Holding Co. It trades about -0.07 of its potential returns per unit of risk. CSG Holding Co is currently generating about -0.12 per unit of risk. If you would invest  4,330  in Smartgiant Technology Co on December 26, 2024 and sell it today you would lose (570.00) from holding Smartgiant Technology Co or give up 13.16% of portfolio value over 90 days.

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

Smartgiant Technology Co  vs.  CSG Holding Co

Smartgiant Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smartgiant Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CSG Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSG Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Smartgiant Technology and CSG Holding

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

The idea behind Smartgiant Technology Co and CSG Holding Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.