Correlation Between CSG Systems and Arbe Robotics

Can any of the company-specific risk be diversified away by investing in both CSG Systems and Arbe Robotics 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 Arbe Robotics 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 Arbe Robotics Ltd, you can compare the effects of market volatilities on CSG Systems and Arbe Robotics 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 Arbe Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Systems and Arbe Robotics.

Diversification Opportunities for CSG Systems and Arbe Robotics

-0.46

Correlation Coefficient

CSG Systems  Arbe Robotics

Very good diversification

The 3 months correlation between CSG and Arbe is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CSG Systems International and Arbe Robotics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics 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 Arbe Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbe Robotics has no effect on the direction of CSG Systems i.e., CSG Systems and Arbe Robotics go up and down completely randomly.

Pair Corralation between CSG Systems and Arbe Robotics

Given the investment horizon of 90 days CSG Systems International is expected to generate 0.18 times more return on investment than Arbe Robotics. However, CSG Systems International is 5.52 times less risky than Arbe Robotics. It trades about 0.09 of its potential returns per unit of risk. Arbe Robotics Ltd is currently generating about -0.02 per unit of risk. If you would invest  4,677  in CSG Systems International on September 23, 2024 and sell it today you would earn a total of  445.00  from holding CSG Systems International or generate 9.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.69%
Values	Daily Returns

CSG Systems International  vs.  Arbe Robotics Ltd

CSG Systems International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSG Systems International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, CSG Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Arbe Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbe Robotics Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CSG Systems and Arbe Robotics

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

The idea behind CSG Systems International and Arbe Robotics Ltd 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .