Correlation Between CSG Systems and CCC Intelligent

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

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

Diversification Opportunities for CSG Systems and CCC Intelligent

-0.6

Correlation Coefficient

CSG Systems  CCC Intelligent

Excellent diversification

The 3 months correlation between CSG and CCC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and CCC Intelligent Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC Intelligent Solutions and CSG Systems 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 CSG Systems International are associated (or correlated) with CCC Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC Intelligent Solutions has no effect on the direction of CSG Systems i.e., CSG Systems and CCC Intelligent go up and down completely randomly.

Pair Corralation between CSG Systems and CCC Intelligent

Given the investment horizon of 90 days CSG Systems International is expected to generate 1.17 times more return on investment than CCC Intelligent. However, CSG Systems is 1.17 times more volatile than CCC Intelligent Solutions. It trades about 0.19 of its potential returns per unit of risk. CCC Intelligent Solutions is currently generating about -0.31 per unit of risk. If you would invest  5,157  in CSG Systems International on December 26, 2024 and sell it today you would earn a total of  1,009  from holding CSG Systems International or generate 19.57% return on investment over 90 days.

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

CSG Systems International  vs.  CCC Intelligent Solutions

CSG Systems International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSG Systems International are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, CSG Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

CCC Intelligent Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC Intelligent Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CSG Systems and CCC Intelligent

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

The idea behind CSG Systems International and CCC Intelligent Solutions 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.