Correlation Between American Express and FactSet Research
Can any of the company-specific risk be diversified away by investing in both American Express and FactSet Research 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 American Express and FactSet Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and FactSet Research Systems, you can compare the effects of market volatilities on American Express and FactSet Research 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 American Express with a short position of FactSet Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and FactSet Research.
Diversification Opportunities for American Express and FactSet Research
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and FactSet is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Express and FactSet Research Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FactSet Research Systems and American Express 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 American Express are associated (or correlated) with FactSet Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FactSet Research Systems has no effect on the direction of American Express i.e., American Express and FactSet Research go up and down completely randomly.
Pair Corralation between American Express and FactSet Research
Considering the 90-day investment horizon American Express is expected to generate 1.17 times more return on investment than FactSet Research. However, American Express is 1.17 times more volatile than FactSet Research Systems. It trades about 0.1 of its potential returns per unit of risk. FactSet Research Systems is currently generating about 0.02 per unit of risk. If you would invest 15,339 in American Express on September 3, 2024 and sell it today you would earn a total of 15,129 from holding American Express or generate 98.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. FactSet Research Systems
Performance |
| Timeline |
| American Express |
| FactSet Research Systems |
American Express and FactSet Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and FactSet Research
The main advantage of trading using opposite American Express and FactSet Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, FactSet Research 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 FactSet Research will offset losses from the drop in FactSet Research's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| FactSet Research vs. Dun Bradstreet Holdings | FactSet Research vs. Moodys | FactSet Research vs. MSCI Inc | FactSet Research vs. Intercontinental Exchange |
Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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